The Business Life Cycle

Those building businesses must recognize that every product and industry evolves in stages and that such life cycles require senior management to constantly assess, and then reassess, where their business is headed. Ian MacDougall, the founder and professional director of Corporate Lifecycles LLC, believes that the stages to any business can be boiled down to the following four: ^[2]

^[2] Adapted from TEC Worldwide, Inc., "Best Practices: Sustaining Growth."

• Infancy: Period in which the business is founded and scrambles to survive. The focus during infancy is on achieving what needs to get done to ensure that early customers are satisfied.

• Go-go: Second stage in which the initial customer base allows the business to break even, and then grow rapidly through proactively exploiting new opportunities.

• Adolescence: As growth continues, lack of infrastructure can cause growing pains and forces organizations to focus on what needs to be done to sustain early success.

• Prime: At the peak of the company's growth cycle, the organization is finally hitting on all cylinders, simultaneously enabling it to turn a profit and allowing the company's personality and culture to shine.

These stages of the business life cycle will be explored in greater detail later in this chapter by considering NASCAR, one of sport's best examples of how to build a small regional business into an international powerhouse. Prior to that analysis, however, it is necessary to consider what issues fledgling businesses must address if they are to hit the ground running.

Regardless of which stage a company finds itself in, impediments to starting and growing the business exist. How exactly from both a financial and strategic perspective will you go about getting started? What kind of leadership style do you prefer? Once a business gets going, understanding and acknowledging precisely where a particular organization is in its life cycle will allow it to accurately diagnose and then address issues that could stunt company growth.

For example, in the infancy stage, cash management issues and personality clashes among founders might persist. During the second stage, vulnerabilities could include a lack of human or financial resources necessary to meet demand. Inappropriate organizational structure and goal setting might mar the adolescence stage. Finally, and from MacDougall's perspective, the prime stage routinely brings with it the challenge of redefining what business (or businesses) the company should pursue.

Before obsessing over business stages, budding entrepreneurs must decide for themselves if they have what it takes, particularly in terms of vision, to get into the game.