Home Based Business
Start Up and Beyond
A small business start up is exciting and scary, but the real challenge comes during the next stages. Dr. Greg Chapman has outlined the different stages of business growth very well.
Business Start UpThis is the shortest phase. And actually, the shorter it is, the better. During the initial development and implementation, any business burns cash and makes losses. In a home based business that might not be so noticeable, because the biggest input is your own time. But when you remember that any time you spend is lost time earning other money, it becomes more significant. During the start up phase you may not have achieved everything you want to for your business, but as soon as you have a workable operation you need to get it launched. The sooner you are actually operating the business, the sooner you can iron out any unforeseen problems, and start making money! Plus, your customers and potential customers do not need to know that you are a new business, that you are not fully set up, or that you may not know what you are doing (yet)! They just need to know that you can legitimately deliver what they are looking for.
MY PERSONAL VIEWPOINT
While you should always be realistic about the value of your time, spending time is sometimes all you can do when you have no money to spend. Time is almost always a worthwhile investment.Every business needs time and commitment whether it is a start up business or an established business. Time spent early on, in the right areas, should result in a solid business down the track. There are never any guarantees but if you have done your homework and believe in your start up idea, then it is important to persevere. Many a successful business has been started at home, by someone in their spare time, following their passion, with very little money to get them going. Once you have established that your home based business has merit and potential, then it will become easier as the money starts to come in.
YouthThe Youth stage is when your business is starting to make a moderate profit, but most of your energy is focused on learning how to conduct your business successfully.Your customers should grow almost by themselves if you have put in the groundwork of establishing your target market and making your business known to that group.
Everyone is excited about your products and services. More often than not at this stage, all of your profit is being put back into your business to ensure it continues to grow. If you can hold off taking money out of the business, then your business will grow faster. You do not want to prematurely rob yourself of opportunities for the sake of some cash at this early stage.
Growing PainsGrowing pains happen when you are busy satisfying current clients and cannot really take on more. That is really the deciding point about the future of your business.Either you cave in and are buried under the pressure. That will lead to maturity and the start of the decline. Or you re-invigorate the business, by changing its structures and systems so that you are able to deal with more clients. That usually means freeing your time from delivering the services. That will be the start of the Second Youth. For an owner operated home business, this is often a crucial decision making time. WHAT DO YOU REALLY WANT FOR YOUR BUSINESS? Do you want / need the business to grow bigger than it already is? Will you now have to employ staff to assist you, and is this what you really want to do?Will developing a bigger business actually bring in more income?Is there another way to approach the extra work you have? e.g could you franchise your business so the business can grow based on a franchise model?Could you contract out some of the work and still make some money on it?Could you automate some of the work by investing in new equipment?
MaturityMaturity is a very profitable stage of the business. You know how things work, turnover and profits are pretty stable. This can be an excellent time to re-think how you operate your business. Could you be more "hands-off" by employing a manager?Could you employ a manager for this business so that you can develop a similar model elsewhere?Are you ready for a different challenge while allowing your existing business to bring in the income during a new start-up phase?Are you happy to simply continue on while enjoying the fruits of your labor?Is there another complementary business you could purchase to add-on?Is it time to sell?
DeclineWithout a strong leader and a clear vision, the business will ultimately decline. Times change, needs change and businesses that fall behind get suddenly overtaken by newcomers who are more hungry for success, who are more eager to please their clients. Even if you are not doing the day to day running of the business you still need to keep a good eye on "trends", and what is happening in the business and its industry. This will allow necessary adjustments to be made to products, services, pricing, marketing, advertising etc to combat negative changes. It will also allow you to decide if this is the time for you to sell and do something new.
The Second YouthThe second youth is not comparable to the very beginning of a home based business. More capital is necessary, more people are involved, but just the same it is a start up as well. With the same risks and even higher rewards. For a more in-depth treatment on business growth I recommend Dr. Greg Chapman's website. Not everyone will desire to be involved in the Second Youth stage. Sometimes it is a signal to hand the business over to someone with the passion and drive to carry it to the next level. Others will find this time as exciting as when they first developed their business. The choice is yours, but timing is often essential. If you leave it too long the opportunity may pass you by... should I stay or should I go... whatever the answer, you need to make a timely decision before the business declines too far.
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