Business Article
How Evolved Is Your Business?
(The Seven Stages of a Business)
By Pam Butterfield
Stage Three: Making Products, Creating Customers
The “Products, Customers” Stage is about increasing market
awareness and sales. Early efforts to promote the product begin to pay
off with strong sales growth. But will the company be able to meet marketplace
demand?
Founder’s mindset: Work now comes fast and furious,
with attendant high levels of stress and deteriorating personal relationships.
Compounding the problem is the founder’s tendency to “do
it all.”
Management practices: Management systems remain highly
informal. For example, typically there are few specific and documented
policies for HR, marketing, accounting, etc. The firm’s “knowledge”
tends to reside in the heads of one or several people, which limits
the degree to which it can be transferred to new employees. The owner
also has difficulty “designing the work” and then “delegating
the work” to others. He or she tends to want to “do the
work.”
Planning mechanisms: The founder often pushes forward
with his or her original ideas, plans, and actions, with little or no
analysis or formal planning. These actions may or may not be appropriate
for the future.
Financial considerations: Cash flow remains a key
issue in this stage. Strong sales do not always equal high profitability,
and the founder may pursue short-term revenues that ultimately hamper
long-term profitability.
Products and services: The product/service portfolio
is in good shape. With more customers buying the product, the company
now has a huge opportunity to capture reliable feedback from customers
in order to further refine products and services. But this opportunity
is often ignored.
Key challenges at the boundary: To move into the next
Stage, business owners must work hard to grow the business beyond their
own ideas and personalities. It must become an entity unto itself. And,
the business must come to rest on a strong and solid foundation.
Continue
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