In previously posts about business potential energy I write that in the methodology of business improvements, we must include business life cycles because we have different business elements with different business potential energy in a different business life cycle level. We will use business life cycle levels to describe some business elements in correlation of the business potential energy and business performance. I use 6 different levels of a business life cycle for all business:
- Dreaming. Every business starts with a business idea. I named this level as dreaming because here we really dream. You as an entrepreneur or future entrepreneur dream about your business. In these level entrepreneurs come up to several business ideas, analyze them and choose one of them that is the best or optimal business idea. In this life cycle level, you don’t have too many business elements with different business potential energy. Here, one and only business element that can have potential energy isa business idea. The better business ideas, the more business potential energy.
- Startup. Successfully finished first level presents transfer to second level – startup. Here entrepreneur take first steps (actions) to legalize their businesses. This level is transforming the business potential energy stored into the business ideas through business plan into the real business. Now you have more crucial business elements that are important for this life cycle level. One of the most crucial elements is selling and finances.
- Problematic period. In this level may to come decreasing of the morale of the entrepreneur. Here you will realize the complexity of having and managing your own business. Why this level is problematic period? When business is started then will start also first real problems as lack of finances, low level of selling, high costs. This level of business life cycle needs real decisions. One of the most crucial business elements in this life cycle level are selling, marketing, finances, sales team, quality and so on.
- Devilment. If the business survives previous level of problematic period go into a level of devilment. In this level entrepreneur feel that finances are stabile and selling to constantly rise. But, here exist risk for crazy behavior from an entrepreneur with uncontrolled spending of money in some unnecessary things and investments. If this continues for some period the business may to return into a previous level of a business life cycle. Now the most crucial business elements will be managing, development, finances, planning and so on.
- Top form. When an entrepreneur overcomes or finished previous level go into top form. In this level income and selling is in the high level, managerial and selling team is formed. Everything functioning really good. But, there exist danger business to go in one of two worst levels of a business life cycle. One is devilment (previously level) and one is aging (the next level).
- Aging. This is the level when all things go in some decreasing line. Entrepreneur and their business don’t have energy to return with actions to competitors. This level needs big organizational change. Changes are only thing that can bring fresh energizing into the business and most important business elements for returning business potential energy that was spent.
In the figure below are given these levels of business life cycle.
In these pictures is presented business performances (vertical axis) and time on the horizontal axis. As you may to see that from the beginning business performance is in the low level and as go through business life cycles the performance increasing. However, when business goes into aging level business performance go down.
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