"It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change." Charles Darwin (n.a.1, n.d.1)
It is important to know the business life cycle in order to expand the small business. It mostly consists of five phases. The diagram below shows the stages of business life cycle:
Stage One: Start up or establishment
Every business, first step would be establishing where the business is created and planned. This is where the idea is put into action. Business owners at this stage try to establish itself in the market and win investors and customers therefore the primary concern here is securing funds for development and survival. The questions that come in manager's mind at this stage would be like can we get enough customers? Will we survive? Do we have enough money? The first stage is based on what if scenarios and it all depends on good business planning. The challenge here is that its a sort of a seed stage, hence companies will have to overcome the market acceptance challenge. The business structure, getting professional advisors all comes in the business planning so that business can head towards the growth phase.
Stage Two: Growth
The second stage is the growth period. Business owners establish their brand identity and business trust within customer using the marketing practices. Sales and profit starts to rise due to the advertisement and other marketing tactics. The real test depends on this stage and it is important for the business as to how well they manage and compete. The speedy growth of product line, rise if operational complexity and rising income is the signs of growth. It is important for the managers to delegate authority, emphasize on procedures and rules to improve the day to day running of business and it's easier for business to step in the third phase.
Stage Three: Reinventing (Expansion)
The third stage of small business is of expanding. Business makes profit and expands its activities such as recruiting more staff, investing, increasing production if necessary.
Stage Four: Reinventing (Maturity)
Business attains maturity level where the profit margins are fairly stable to survive. It has enough savings, capital and support even any uncertainties occur they can survive. "This may be accomplished by rearranging its management plan, getting rid of one product to replace another or adding an additional product to an already existing product line" (n.a.2, 2008 ). Some business uses "milking" strategy that involves getting the most out of the product in terms of