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Four Stages of Business Growth

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With the natural passing of time a business enters into different phases of its life. “Like a person or a family, a company experiences predictable stages of growth, each with its own problems and opportunities.” (Vastine) In order for a business to capture the market it needs to go through the stages to gain popularity. Every business has its own set of guidelines and processes designed to function well. “As the business grows, its organizational structure is heavily influenced by function (people grouped with similar responsibilities), process (people involved in similar processes), product (people building a specific product) or projects (members of a project).” (Watson, 79) The first stage consists of growing the business. “ In a one-person operation, the owner does everything: sales, bookkeeping, marketing, production and so on. Many firms remain one-person operations indefinitely due to the owner's family obligations, financial constraints, or contentment with the status quo.” (Longenecker,27) This is the initial phase that every business goes through. It can also be referred to as the expansion phase as the business tries to establish its niche in the market. Stage two is all about growing and establishing the business. “So the owner assumes additional employee management duties such as hiring, scheduling, supervising, and payroll.” (Longenecker) This is the stage where the business owners start establishing their brand with their loyal customers. Overall, the growth stage is marked by increased sales, rise in profit, and establishment of the brand in the given market. Stage three is when things start getting professionally serious, and owners start adding employees under supervision. By stage three the customer base, investors, and other business networks are all there. Sales usually are at their all time high in this point and they should be steady.

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