Business creation and growth
Identify and discuss the four most important factors that need to be considered during the growth stage.
In order to be maximally precise writing about the four most important factors in the growth stage, the first thing I believe should be done is to describe accurately what exactly a growth stage is. This is the second stage in the product life cycle, characterized by increasing sales, high profits, and market entry by competitors.” During this stage a successful product experiences steadily increasing customer acceptance and also brand recognition. Advertising and promotion efforts are focused on product differentiation from that of the competition. This is also the stage when companies might withdraw from the market due to lack of acceptance, product failure, or lack of profits.” Source: http://www.investopedia.com/ ; article: Buy and Hold, Growth Investing;
The four most important factors in this stage are the control, which we should obtain, the responsibility we are supposed to take, the tolerance of eventual failure, and the changes which we might have to get through. Focusing on each one of the factors will give us the best idea of the concept, and help in understanding the relation between them.
I. Control factor
Although the natural growth happens more gradually and naturally than buying up other businesses or entering new markets, it still needs to be controlled. What we need to know is how it is happening and be accurate about our plans, ambitions and expectations for development .We also should have in mind that if it happens too quickly or without structure, our business can get seriously damaged. There are some really important questions we should ask ourselves in order to manage growing our business in the best possible way. The first of them is if the control system imply enough trust, and from it derives the second one-does the allocation system imply trust. It is really important they both to be trustworthy. And if the answer of the third question-is it easier to ask permission than to ask forgiveness-is “yes”, then we are on the right way in growing our business. When we are considering growing the business we should begin with figuring out everything needed we don't have in place already to achieve the growth we are searching for - any extra staff, re-negotiation of existing contracts, marketing, means of distribution, management of new sales channels, storage space, raw materials, and so on. It includes also talking to suppliers and manufacturers and discussing price What we should be really careful about are our finances. The cash flow will increase for sure together with our company growth, but spending money should be avoided unless it is really needed. Hiring new stuff should also be avoided as much as possible. Usually the best alternative for that is increasing the wages of the already hired stuff which will motivate them, and make them more productive. This means also fewer expenses for the business. What else we should have in mind is if there is market big enough for the stock we are producing, and also for new products, services and ranges. Encouraging customers to refer friends rather than splashing out on expensive marketing campaigns to reach new customers is also a good strategy. Another thing we should bear in mind before taking the step to expand our business is to be sure we have the time and the resources to do this. Always take into account both the human and material costs associated with each transaction, client, or segment of business. This includes physical space requirements, carrying costs of product or labor, and working capital needs. Long term growth can be achieved by taking the time to identify and then focusing on those segments of business that create more margin for the organization over the long term. Small businesses are finding themselves adjusting their growth strategies to meet the changing...
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