Knowing and managing stages of growth and managing capacity

The company will initially be in a start-up phase, and it will be entirely CEO Centric and dependent on the entrepreneur. Depending on how many individuals are added to the organization, the firm will alter quickly. People have a significant influence on a company. In actuality, the organization becomes more complex the more individuals are hired and kept. Depending on the rate of expansion and the number of new employees, the company may go through several stages of development.

• Existence stage:
  In the initial or start-up phase, it needs strength, money, and clients to turn a concept into a business. The main source of money and energy comes from the entrepreneur himself, and if others have aided, he oversees them directly. Existing and surviving is the only objective. A formal planning process is never involved.
  Customers are the most important things at this point. not a letterhead, a corporate car, or business cards. At this fledgling stage, businesses fail because they struggle to develop precise product ideas and have no idea how to locate, entice, and sell clients. A corporation that has a vague product plan and a transparent and fair marketing strategy is more likely to succeed than the opposite.
• Survival stage:
  If businesses survive the startup phase and demonstrate that they have a product that consumers can and will purchase, then survival becomes their top priority. The business owner must be able to generate enough revenue to pay for your expenses. Additionally, the owner must be able to finance expansion.
  Mom and pop shops barely develop during this phase. The founder typically views the company as an extension of themselves and struggles to imagine being in charge. Owners are unwilling or unable to distribute responsibility because they are content with marginal returns on their investment and labor. At this stage, it is not unusual for a company to go bankrupt. They lack the funds to pay for the expenses of creating new items and paying additional workers to provide more services. Job one is to forecast cash flow. Now is the moment to start considering replacing yourself with someone who is skilled at running a business rather than just launching one.
• Success stage:
  When a corporation is financially stable and producing average or higher earnings to guarantee success, it may stay at this stage consistently. More than just seat of the pants leadership is required for organizational development, financial management, and delegating to a developing management team. Some founding members possess the temperament necessary to successfully expand an organization past this point. Owners must now determine whether they want to separate or pursue expansion. Entrepreneurs typically have new business ideas they want to test, newly-prominent corporate leader projects about running for political office, and some just want to enjoy the rewards of success and pursue hobbies or other extracurricular pursuits. If the owner decides to keep running the business and expand it, he or she must concentrate on increasing their borrowing capacity and using funds to finance the extension.
• Takeoff stage:
  The main issues will be delegating and money if a firm decides to expand. To manage the expansion, a complex business, and an emerging business climate, the organization will need capable management. There is always a chance that the business environment will change, but a sudden shift that occurs just as the company embarks on a rapid ascent might be overwhelming. A corporation may be able to revert to being "simply" a successful company if it is unable to expand. But after failing to take off, businesses now find themselves back in the survival stage. The business firm is going through a crucial period. The business owner must choose whether to grow their firm into a large corporation or sell it for a satisfactory profit. It's important to understand one's own limitations. It does not necessarily follow that the owner has what it takes to succeed just because they were able to construct a successful business both literally and symbolically. Success has a dangerous way of making you feel all-powerful, which might cause you to grow quickly and run out of money or become too complex to handle.
• Maturity stage:
  If the entrepreneur is successful in building a mature business, managing the significant financial resources will be one of the largest problems. The owner will likely have a whole division working solely on that. The largest difficulty, though, will be cultural. A world that is changing quickly requires people to be flexible and agile. The owner of a business might lessen the impact of obstacles by anticipating what they will be in the future. Ben Franklin, a successful businessman, once said, "If you don't plan, you're planning to fail."

Managing Capacity

Growth may lead to issues by taxing resources, straining cash flow, or allocating a large portion of a company's resources to a single project or client. Generally speaking, any one of these would bring "forced expansion" and perhaps even chaos into what is often a stable and balanced, sustainable endeavor. Growth is a fantastic challenge, but it can also be very stressful if the company is not ready for it. The following advice can help you manage success and prevent forced extension.

• Control and measure the firm’s marketing and promotion: Determining and keeping track of the sources of the company's potential customers so the owner may adjust marketing efforts to either boost or decrease lead creation. For instance, press releases, pay-per-click sponsorships, or ad placements.
• Understand the service/ production capacity: Make an effort to comprehend the company's capacity or availability to deliver a service or a product over an extended period of time. A company may control its production flow rate, ensure order commitments that can be obtained, and manage resources and quality needs with this knowledge. A business can implement a smart growth strategy if it frequently hits its capacity.
• Spread the risk: It can be challenging to ignore work. If the company is doing everything properly, a client can desire more and more from it, but they should be careful not to make up too much of the business's turnover.
• Consider the following options: It's crucial to create numerous streams of revenue. An example would be to slightly alter the sectors a company targets in order to lessen the influence of trends or market shifts and protect the owner personally. The goals that specify the maximum percentage that each one project can contribute to the company's revenue should be set by the owner themselves.
• Price right: Modifying or raising their pricing policy can be an useful way to manage the volume of interest while holding the quality of clients the owner seeks if the demand for the goods and services is medium to high but they firmly do not want to develop too rapidly. Combining this with the marketing control outlined above is a powerful combination.
• Partnerships and referrals: Think about establishing collaborations with rivals or relevant firms or building referral relationships. If a referral fee structure can be controlled for times when the company is unable to commit, a rival has also been transformed into an opportunity, and the company has avoided the terrible PR respond of rejecting down work and the possibility of "forced expansion," conducting work for others may be profitable.
• Get a Mentor: A fair and objective outsider's perspective is always beneficial for identifying concerns and problems, aiding in future planning, and serving as a knowledgeable sounding board. Find a mentoring group that has been there, done that, or is still doing it in your community.

Reference:

Agrawal, Dr. Govinda (2014). Entrepreneurship and small business management in Nepal . KTM: M.K Publishers and Distributors.

Baumol, WJ. (2004). Entrepreneurial enterprises, large established firms and other components of the free–market growth machine. Small Business Economics

Churchill, N. C. (2011). https://hbr.org. Retrieved from hbr.org: https://hbr.org/1983/05/the-five-stages-of-small-business-growth

Willis, S. (2015). www.talentculture.com/. Retrieved from talentculture: http://www.talentculture.com/making-it-to-medium-managing-business-growth