Four Stages of Growth of a Business

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Describe the characteristics of each of the four stages of growth a business organization might experience? There are four stages of growth in a business. Stage 1 is the start up stage. If it is a one person operation, the owner is responsible to handle everything for the business including production, sales, marketing, bookkeeping, and advertising. This stage usually requires a large investment of money and time for the owner. Financial issues may cause the business to stay in stage one for an indefinite period of time. Stage 2 is the growth stage. As the business begins to grow the owner needs to add employees. The owner will continue doing the tasks but he/she now will be in charge of the hiring of employees. The market is starting to be established for the business, which leads to an increase in sales and profits. The owner now will be responsible for the scheduling and supervising employees and payroll. The more the business grows the more the owner will need to expand the work force. When the market for the company grows so will the business and the profits. Stage 3 is the expansion stage. The owner now starts to notice that the company is finally starting to pay off. As the business expands, so will the employee base. The company now will need to add a new layer of employees, the professional management team. Now is also the time to add new partners if wanted. Now is the time that the owner may need to start checking to make sure that everything is in order for the company. The product line starts to stabilize as the business gets into a more day to day routine. Contacts are established for the business and a steadier stream of profit starts to come in. It now is easy for the business to borrow money to do the expanding that it needs to do. Marketing will need to increase so to keep its position. Now is also the time to start expanding the company’s

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