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This is the second, and concluding part of last week's article. In it, we will discuss how the stages of a small business' life cycle are affected by the personality types. Also, we find out at what stage small businesses tend to fail the most.

 Rows of Butterfly cocoons

If you missed out on the first part of this article that discussed the three personality types in business, here it is. It's important you read it before you go further.

 

Every successful small business has a life cycle which includes the following stages: 

  1. The Infancy Stage
  2. The Adolescence Stage
  3. The Maturity Stage

 

The Infancy Stage

This is the beginning stage where you open your retail store or your own cake shop. At this stage, you're a one-man army. You're the baker, stocktaker, store attendant and accountant. Your business is still small so you can handle it all. After a while, people begin to frequent your store and sales begin to soar due to positive word of mouth reviews and recommendations. You find that you're unable to keep up with demand and your products and services begin to fall short of initial standard. You get complaints from left-right-center and you promise to look into them. You never do because you hardly remember or you have no time to. The business is about you and things cannot run if you're not there to make them. Soon enough, you begin to lose customers and you're faced with the choices of quitting or hiring help.

 

The Adolescence Stage

At this stage, your business has grown a bit and so you decide to go on and hire help but, sadly for you, you're more of The Technician and you have little to no knowledge of how to be a Manager.

 

Your poor management skills further contributes to your business' demise. The person/persons you have hired are making things worse as they are lackadaisical in their approach to business or they are rude to your customers or they just misbehave a lot because of little or no supervision from you. All you care about is sharing responsibilities and reducing your own workload. It's more about you than it is about the business. Eventually, things fall apart because the centre can no longer hold.

More business drop out at this stage and only a few go on to the next stage. As seen before, 80% of businesses that make it to this stage eventually drop out.

 

The Maturity Stage


This is the stage where the small business has gone on to become stable, successful and progressive. However, something Gerber pointed out in his book struck me. He said, "A Mature business knows how it got to be where it is, and what it must do to get where it wants to go. Therefore, Maturity is not an inevitable result of the first two phases. It is not the end product of a serial process, beginning with Infancy and moving through Adolescence." 

Gerber’s critical point was mature companies were mature even before they started out. The people who started them had different perspective and approach to what business is really about. They didn't start out in hopes of growing, they started out with the assurance they would grow and become big. They ran their businesses at the beginning the way they would run a company.

 

What's the lesson to take from this? I believe, that while it is good to have technical knowledge of a business, it's not more important than having an entrepreneurial view of things and the ability to successfully manage people and processes. We have seen that there are 3 of these personality types within small business owners, it is left to you then to work on the ones that matter most for making your small business successful. It is important you work on your ability to manage things and maintain order; the key thing to note is learning. Furthermore, you must understand the need for vision, innovation and creativity. Also, you must understand that for your business to be truly successful, it must be able to run smoothly in your absence. That you're not physically present on site doesn't mean chaos should reign. You must put a system in place that will be effective even in your absence; think system system and process automation. That's what makes great companies great. That's what makes McDonald's what it is, and the same goes for KFC, Disney, FedEx and of course Apple, amongst others. Though they started small, they didn't run with small visions. Today they are not just companies existing but they are giants. Your vision should be your reality and your reality should become your existence.

 

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7 Comments
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James
4 days ago
Its the transition between stages that's the real killer! Thanks for s well written article and look forward to more from your team.
Osas
4 days ago
Thanks David. Very insightful. There's a problem if businesses cannot determine they stage they are in the cycle. There's the problem with planning; medium & long, product development amongst other issues. Looking forward to your next post
Teniola
4 days ago
Very insightful piece. Change is inevitable and every business must constantly change. Not losing touch with the customers irrespective of the stage of growth is very important.
Simi
4 days ago
" Your vision should be your reality and your reality should become your existence" this could not ve been better said, of course good management skills are crucial in scaling each hurdle.
Law
3 days ago
Insightful.
Mofe
3 days ago
Interesting point David. If a business owner delegates work just so that their work load is reduced without supervision then things will start to go wrong. I have seen first hand experiences of this happening.
Damian
27 days ago
Nice, the vision of the founder(s) will eventually determine how far the business will go.