Your business is constantly changing. As time goes by, your business will progress through various stages of the business life cycle.
Businesses go through developmental stages the same way people do. As someone with twin daughters, I know the parenting strategies we used when they were two years old; don’t work now that they’re five. And the strategies we’re using now will not work when they’re ten years old. Quite frankly, when they are teenagers, I’m not sure anything will work.
There are numerous articles & papers that have been written related to the business life cycle. Some people feel there are four or five stages, some people more. Everyone gives the stages different names, but in the end they all cover the same thing. In this blog series, we’ll talk about what we see as the seven stages of the business life cycle and the challenges of each.
Stage #1 – The Idea
This is the point where your business is just a passing thought or perhaps more accurately, a dream. It’s the birth of a new business. One of the biggest challenges business owners need to consider in this stage is market acceptance. Why will people buy from you? You have no track record, no success stories, no one to “sing your song”. More importantly, even if you did, what song would they sing?
A common mistake businesses make is to try and be everything to everyone. What do you really do well? What are you going to be? And to whom? What are your core products? As we’ve discussed before in this blog, it’s vital to understand your Sustainable Competitive Advangage (SCA) . This is also the time to figure out what kind of ownership structure you’ll have, who your professional advisors will be, etc.
If your business is currently in the “dream” stage, what challenges are you facing? If your business has already passed through this stage, what other challenges did you deal with? What did you learn? What advice to you have to pass on to others?