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.
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:
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.
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.
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.
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.
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.
In particular, read Section 2. This concentrates on surviving the early years of business.
In particular, read Sections 3, 4, 5 and 7. These sections cover: Business focus, marketing, finance and relationship management.
In particular, read Sections 3 and 8. These sections cover: Business focus and growth.
In particular, read Sections 6 and 7. These sections cover: Resource and relationship management.