Life Cycle of a Start-Up: Which Stage Are You?
The different stages in building a business. Overcoming the obstacles at various stages.
The “business life cycle” starts right from the moment you decide to set-up your very own business. You will have to work your way through the various start-up stages during your business journey to turn your idea into a successful business.
While many new entrepreneurs say that running a start-up isn’t that complicated, a closer look at the different stages in the start-up business development cycle will help you understand the obstacles that arise at every stage and hoe to deal with the same.
As your start-up gains momentum and grows into a successful business, your business objectives, aims, strategies, and plans must also evolve to meet its growing requirements. That’s why it’s very important to understand what stage of business you are into before proceeding to upgrade your business.
Stage 1: Idea & Development
Every start-up business is born out of an idea. Of course, not all ideas are worth building a business. If you have got an innovative start-up idea, you’re set to go. But first, you ought to understand whether your idea is likely to succeed or not.
Start by acquiring opinions and options from people you know. Talk to friends, family, colleagues, and any industrial professional to understand their views on your business idea. These initial opinions are the deciding factors that determine the success rate of your business.
Ultimately this can be considered as the soul-searching phase of your start-up. This is where you explore your business idea in detail, decide to step back and come up with an improved idea, or consider taking the plunge into the business world. All you need to do is ask yourself if you’re ready to face the challenges.
Stage 2: Setting-up your start-up business
Once you have clearly explored and tested the business possibilities around your idea, and found a strong success pointer in it, then you can go about and make it official. This is considered as the riskiest stage in the entire start-up lifecycle, as it can impact all other business stages.
Mistakes made at this stage are capable of impacting the growth of your start-up some years down the line. In fact, many professionals believe that mistakes made during the start-up launch are the primary reason why many start-ups fail with a few years.
The only way to avoid this failure factor is to implement adaptability. You must spend the initial stages of your business in fine-tuning your product/service depending on the initial feedback that you receive from your early adopters. You must learn to distinguish valid feedbacks and tweak your product accordingly.
Stage 3: Establishment & Development
This is the stage where your business goes into a steady state and you start generating consistent source of income. When the recurring turnover is capable of covering all your ongoing expenses, you would know that you have reached a steady state in your business.
Now you must focus on a whole new set of demands — perfecting your customer support, increasing the revenue, putting up with the competition, acquiring more customers, and more. The biggest challenge here is to effectively divide your time between the existing protocol and managing the whole new set of requirements.
You must start establishing your brand and come into your role as the founder of your business. You must now start setting real rules and regulations for the business operations happening within your organization. Build an organized team and start following a professional business environment.
Stage 4: Focusing on Expansion
When you feel that you have successfully established a routine-like structure to your business, then it’s time to expand. Hire more staffs to manage the operation that you don’t have to concentrate anymore. Start spreading words about your business and work towards firmly establishing its presence in the industry.
Of course, there are two sides to this coin. While planned execution might take your business forward, careless expansion will actually bring you down in no time. You must always look at your existing recourses and make only realistic plans for expanding your business.
An added advantage is having a good business model behind your expansion plans. It’s always better to plan out the entire operation, rather than taking instantaneous course of actions. Any proceeding comes with its own drawback, but taking measured risks can counterbalance your expansion losses.
Stage 5: Push further or Exit!
When you have successfully expanded your business, you will reach a stage of stable profit. While some start-up businesses take up the path of continuous expansion and growth, others might have to operate over an expected, streamlined turnover. This again depends on the type of business you run.
Many entrepreneurs have faced this stage. They are left to choose between two options — work towards continuous growth, or exit the business with profit. Many companies change their operations, and take new leaderships at this stage. You can either continue to expand depending on your future projections or decide to exit your company with good share and profits.
Not all start-up businesses will go through this entire life cycle, some might experience them in a different order or might even skip ahead of a stage or two. Some might grow exponentially right after start-up, while another business might jump straight into the exit stage when some profit is achieved.
Whatever stage you’re in, you must be ready to anticipate what comes next and be best prepared to maximize your success rate. It’s essential to make the right decisions at each stage, however you must also be ready to trust your gut instincts and take chances once in a while.
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