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How is business?
Most businesses go in cycles, whatever the general economic conditions. As existing customers drift away and markets shrink, businesses have to adapt by taking up new opportunities and making new contacts. |
| The wise business person recognises these
changes and plans how to deal with them. Even in the worst economic situation, businesses
can do well. Ironically, you are just as likely to get into difficulties with a successful and fast-growing business as with a business that is struggling. Most people start in business to be independent and in control of their own lives and it is important to make sure that you stay in control as your business progresses. |
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1. Growing pains
Establishing a business can be a painful and
challenging experience and familiar problems often recur as your business matures and
grows. Sometimes running a business seems more like fighting one fire after another. Don't
worry. These are growing pains. Every business has them, and yours are not necessarily
unique to you. Now that you are up and running as an
established business you might fall into one of four stages in the development of a
business: These are similar to the human life cycle
birth, adolescence, maturity - with one important exception: in business you can go
backwards as well as forwards. This guide will help you judge which stage you and your
business are at. This will help you to find out which areas you need to work on to develop
your business. These 4 stages have some clear
characteristics: Survival
You are in the first 6 to 24 months of
running your business, possibly the first 6 to 12 months. This stage is about making a
living, however modest. The original business plan probably bears little resemblance to
current reality and probably many aspects of your business have turned out differently
from how you imagined. Consolidation
As you emerge from the survival stage you
will have a clear idea of what your business does, who your customers are and which
suppliers you can rely on. You will also be aware of your weaknesses. These will probably
be in management and business skills, rather than the core skills you need to provide your
service or product. Profit margins and operating margins are tight. As a result you need
good information systems and levels of communication to make sure that you remain
profitable and control the business. Early growth
You have come to realise that you have a good
business with a solid base to build on for the future. You are now in a position to think
longer term beyond the day-to-day running of the business and can start to consider how
you wish your company to grow. Essentially, your business can only grow in three ways:
Remember: your business can also slip back.
For example, a recession could damage your carefully built-up customer base and put you
back to square one. Team building
This is the most sophisticated level and one
which many businesses never reach or aspire to. Your business has grown well beyond the
stage where you can run it all by yourself. Often people running their own businesses find
it very difficult to delegate tasks and responsibility to others, however if you don't
delegate jobs to other people (who may actually be in a position to do some things better
than you), your business will grind to a halt. The size and complexity of your business
should reflect your own ability and ambitions. You need an understanding of good
leadership and the style of leadership you need to manage your staff. Where are you?
Whatever stage your business has arrived at,
you will probably have faced a variety of problems along the way - recognising those
problems is the first step towards finding some solutions. Have you experienced any of the
situations below? If you have, this guide should be of help to you. Don't be surprised if
you have encountered problems in all stages; we hope that this will encourage you to read
the whole guide. Survival
Consolidation
Growth
Team Building
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