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THE LIFE CYCLE OF A BUSINESS

THE LIFE CYCLE OF A BUSINESS. LIFE CYCLE OF A BUSINESS. Every business goes through 4 basic stage before it reaches full maturity. Stages 3 and 4 tend to continue to occur in mature companies. LIFE CYCLE OF A BUSINESS. A. CONCEPTUAL STAGE B. START-UP STAGE

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THE LIFE CYCLE OF A BUSINESS

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  1. THE LIFE CYCLE OF A BUSINESS

  2. LIFE CYCLE OF A BUSINESS • Every business goes through 4 basic stage before it reaches full maturity. • Stages 3 and 4 tend to continue to occur in mature companies.

  3. LIFE CYCLE OF A BUSINESS • A. CONCEPTUAL STAGE • B. START-UP STAGE • C. STABILIZATION STAGE • D. GROWTH STAGE

  4. A. CONCEPTUAL STAGE This stage is divided into four steps: • 1. HAVING AN IDEA or RECOGNIZING AN OPPORTUNITY: Opportunities are found where needs or problems exist. The need or the problem is the opportunity. The skill of identifying these needs or problems is a skill that can be developed when one becomes aware of their surroundings.

  5. A. CONCEPTUAL STAGE • 2. ANALYSING THE IDEA Gather information and ask questions designed to assess the opportunity. • 3. ORGANIZING THE RESOURCES Weigh the money-making potential against the costs of its start up and maintenance. • 4. MOBILIZING THE RESOURCES Prepare for day-to-day running of business. (i.e., rent space). Once this stage is complete business is born

  6. A. CONCEPTUAL STAGE • THE ULTIMATE SUCCESS OF ANY VENTURE IS DETERMINED BY HOW WELL THE ENTREPRENEURS EXECUTE THE FOUR STEPS OF THE CONCEPTUAL STAGE. • THE CONCEPTUAL STAGE CAN TAKE A FEW WEEKS, BUT ON AVERAGE, 6 – 9 MONTHS

  7. B. THE START-UP STAGE • Vision is tested • Business Plan needs revision because everything usually takes longer and cost more to implement than was originally planned. • MOST CRUCIAL stage in the life cycle BACK TO THE DRAWING BOARD!!!

  8. C. STABILIZATION STAGE • When a business reaches stabilization, the cash flow is relatively stable and the financial statements may start showing a profit. • It is during this period that an organization’s structure begins to take shape.

  9. D. GROWTH STAGE • Entrepreneur decides if they want to take business beyond the stabilization stage. • Re-enters planning mode & may require additional financing. • Needs long-term strategies • May start delegating tasks to others. • May need more of the following: structure, employees, funds, expansion. • Advertising budgets & new technology become important to stay competitive.

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