An enterprise’s life cycle repeats itself in businesses of all sizes, from start-ups in a garage to corporate entrepreneurship activities in global Fortune 500 companies. It starts with an entrepreneur who perceives an opportunity, creates an organization to pursue it, assembles the required resources, implements a practical plan, and assumes the risks and the rewards, all in a timely manner for all involved. We present the six stages in the Entrepreneurial Life Cycle.
Stage 1: Opportunity Identification
For years this idea has been running in the head and burning my heart. Now I have started thinking about this more realistically, have done market research to understand the dimensions of the opportunity and most importantly have taken commitment from my inner self that I am ready to role this forward. Here you go… The idea has been born, commitments have been taken and the entrepreneur self of YOU is ready to roll. Point to consider at this stage is to have a deep look inside and see if you are really ready for this opportunity.
Stage 2: The Birth of Your Company
Most start up leaders see birth of the company as the physical incorporation of the business, however this stage actually starts well ahead of that with the development of business plan. Writing an effective business plan requires an intense level of commitment and understanding as at this stage, you are deciding upon the initial vision of your venture. A common mistake entrepreneurs do at this stage is to get started with the venture and holding up the business plan for future. Well this can be fatal.
Stage 3: Launch and Growth
Resources alignment and first sales are typical input & outcomes at this stage. At this stage, it is the entrepreneur’s leadership that drives the company. He would typically wear multiple hats at this stage- ranging from HR to Marketing. Chaos in business affairs is more or less normal at this point and entrepreneurs, who do well at this stage, are able to manage resources and troubleshoot business issues exceedingly well. Both Leadership and management skills are equally important and need to be well-balanced at this stage of entrepreneurship.
Stage 4: Getting Established and Expanding
Post launch, the dust has begun to settle and there is sanity in systems and routines. Role of an entrepreneur here moves to become a helmsman for the organization. He would steer the organization towards clearly defined goals and markets.
Stage 5: Consolidating and turn-around
This phase is characterised by the entrepreneur having to operate in a very tough market environment. Operations/Resources that are not viable may need to be shut down. This phase can be difficult because the decisions involved are the toughest.
This phase calls for the entrepreneur to exhibit the ‘survival skills’. At this stage his tasks and responsibilities are not limited to maintaining a “status quo” but how he can get the company back on track into a growth phase. This could call for reinventing the product or finding new markets and entry strategies.
Stage 6: Liquidity Event
While we work hard to ensure that our creations outlast us, there comes a time when it’s clear that staying in business is would lead you into bankruptcy or would cause such cash flow strain that there simply is no way to dig yourself out of the hole that has been created. Shutting your doors can feel like a failure, but when the writing is on the wall, it’s much better to close up shop before the business takes everyone down with it.
What stage of entrepreneurship are you dealing with today? Do take a moment to recognize where you are in your business and what skills you need to steer successfully through the stage. To get answers to all these questions and to establish your leadership style, please visit us www.leaderinu.in/life.php or join our business skills training program. Based on the life cycle of an enterprise, we have developed a framework to understand the skills required in order to be a successful entrepreneur. It is outlined based on some business must at each of these stages and skills required by an entrepreneur to meet those must or overcome those challenges.