Business Article

How Evolved Is Your Business?
(The Seven Stages of a Business)

By Pam Butterfield

Stage Two: Breathing Life into the Business

The “Open Doors” Stage is about relentlessly working on the myriad tasks needed to launch a company. But it is not typically about the fine points of running a business. Those details are usually left for much later.

Founder’s mindset: The founder usually anticipates making a lot of money and having plenty of paying customers once the business launches. This may or may not come to pass. Plus, the founder has so much on his or her plate; it’s hard to focus on any one or several issues.

Management practices: The founder continues to handle all management functions. In some cases, the founder may share these responsibilities with a small team, usually comprised of family and/or friends. Whatever management practices develop in this stage is typically ill defined. And management team members may actually have overlapping accountabilities.

Planning mechanisms: Planning either doesn’t happen or happens very informally.

Financial considerations: The Company has an acute need for operating cash, but often underestimates the amount and timing of future cash flow. And management tends to be focused on so many things that it may not notice the firm is running out of cash.

Products and services: After the initial launch stage, products and services tend to become more refined. They may be bundled or packaged together. Management may experiment with pricing. Feedback from early customers may suggest product/service updates, but management may resist changing their “creations.”

Key challenges at the boundary: To move into the next Stage, business owners must prepare themselves to handle the initial rush of new business. Does the firm have the human, manufacturing, and people resources in place to fulfill their initial orders?

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