Sample Essay on Stages of Growth of a Business Organization

Every organization, whether big or small, goes through various stages in its growth. These stages are usually similar for all organization and there is a possibility of failure at any stage. It, therefore, requires the entrepreneur of the business to make prudent decisions and carefully select workers that share the same vision with him or her. Without that, the business has a very little likelihood of surviving these stages(Juntunen, Saraniemi, Halttu&Tähtinen, 2010). There are four stages of business growth, and they include: the startup stage; establishment stage; maturity stage; and finally the turning point

Start-up

            This is the initial stage at which the business is conceived as an idea. The idea is held in the mind of the would-be entrepreneur and may exist in the form of a business plan or a prototype of a service of a product that a person plans to supply to fulfill a need in the market. This is the stage at which the business comes into being, after the founder invests in the idea. The period taken in this stage differs for every company, as some take a short time in this stage while others take longer. This is the period at which the financing of the company takes place, often from the pockets of the entrepreneur(LeBrasseur, Zanibbi& Zinger, 2003). The legal structure of the company is made at this stage as is the searching for the clients and making them loyal. This is a stage at which the organization structure is at its simplest with the entrepreneur acting as the manager. It is the riskiest stage, as 80 percent of businesses fail at this stage.

Establishment

            Having survived the start-up stage the business progresses to the establishment stage. This phase involves some growth and the business focuses on finding ways and methods that will help it thrive. At this stage, there is hiring of new workers as the workload increases, and the business attracts external financing. The organization becomes recognized in the industries and its systems of operation such as inventory management and accounting methods are developed and improved(LeBrasseur, Zanibbi& Zinger, 2003). At this stage, the company might also outsource some of its processes to other established organization in the industry.

Maturity Stage

            This is a phase at which the business reaches its adulthood stage. It is characterized by the business striving to control costs, gain and retain sizable market share and seeking of new ways to expand as a business or in its coverage of the market geographically. This is a stage at which the expansion or even survival of the company is dependent on external financing (Wiersema, 1999). This is a stage at which the senior management is supposed to be careful in decision making, as being too ambitious might result to the collapse of the company. The businesses that reach this stage enjoy significant levels of success.

The turning point

            The turning point is reached after the company has enjoyed success and is well established. This phase might be marked by a reduction in the market share of the organization(Wiersema, 1999). This makes the company require additional investment if it is to retain its market share and keep on making profits. The company might achieve this by upgrading its systems or buying new equipment. This is a time at which the company has to make crucial decisions that might include further expansion or remodeling itself in the market

Reference

Juntunen, M., Saraniemi, S., Halttu, M., &Tähtinen, J. (2010).Corporate brand building in different stages of small business growth.J Brand Manag, 18(2), 115-133.

LeBrasseur, R., Zanibbi, L., & Zinger, T. (2003).Growth Momentum in the Early Stages of Small Business Start-Ups.International Small Business Journal, 21(3), 315-330.

Wiersema, W. H. (1999). The four stages in the life of your business.Electrical Apparatus, 52(9), 50-51.