Business Cycle | 3 Substantial Stages to Develop Your Business Properly

Understanding the stages of the business is important for entrepreneurs, especially those who are just starting a business (start-up). It will help us to not become confused in running a business.

There is a recurring phenomenon that is common in business organizations. After successfully developing a product and rapidly evolving, not a few of them are quickly falling (bankrupt). One reason is that there is no stages process of business development. They did nothing for it.

Simply put, the business development consists of three stages:
1. Starting The Business
2. Running The Business
3. Growing The Business

Business Cycle | 3 substantial stages to develop your business properly
start the business

First Stage: Starting The Business

At this stage, a businessman is required to generate transactions. So, focus on the transaction. Simply put: how to keep the money coming.

Thus, to generate it, at least a businessman should build a product, find a market, and then build a canal link between the two. When they have been met, the transaction will occur. This not only applies to SMEs. Large companies that are just starting a new business unit is also doing the same. They focus on developing the product that can be accepted by the market.

At this stage, a businessman must also measure the validity of the product value, is it acceptable or not. A simple measure of validation is: repeat.

For example, you want to start a food business: seafood. The first task is to bring seafood which worth for the targeted market, and after they buy, we must ensure that they come back to buy. When they buy again, then the value has been validated. If the “repeat” transaction has been obtained, then you have already managed to build value in your product.

Business Cycle | 3 substantial stages to develop your business properly
run the business

Second Stage: Running The Business

At this stage, we have to think about how to keep business processes can be run with in an established system.

There are system, people, culture.

There are systems that keep the business process from A to Z. There are systems that move the business from the process of presenting the product, marketing, sales, finance, to management of human who are involved in it.

There is someone who are ready to be tied up and running in the system. So this is the key, that there is a business that always require presence of the owner and there a business that can be run without the owner (run by the system).
Then there is a culture that binds people with the system. There is an understanding of the values ​​that is espoused, whether it is worth or not, whether it violates ethical or not. Business organizations need to build the common sense together, because in fact, every man in the organization has different standard common senses.

This stage is reached if a business owner has successfully run automatically, without the need for his / her 100% attendance.

Business Cycle | 3 substantial stages to develop your business properly
grow the business

Third stage: Growing The Business

When the business system has been running stably, then the business should be entered in the next stage: the expansion and multiplication. Expand and duplicate business!

Simply put, if the system has been established, then the system can be quickly duplicated. Business expansion and improvement of services to the consumer / market will be very effective if supported by the system.

So at this stage, a businessman must enter into a funding strategy, research work and networking. All that three will support accelerating growth.

I will convey the cases I often encounter in the field.

Value Product not yet Completed

Many are confused, why when the company already has the correct system, sales and profit still showed a bed number / result. Whereas a consultant went down to help create a system for the business.

The questions are: Are the products appropriate for sale or not? It seems useless to create a system for a product which  simply can not be accepted by the public / market.

Before we talk system, rules, SOP, job description, job specification, and so forth, businesses need to pass this stage first: Whether the product can be accepted by the market? Does the market want to buy? Does the market want to do "repeat"? Then is there a possibility of others (competitors) to bring the same thing or even better?

If the product is not yet settled, I suggest that a business man continue to improve its product value.

What is the reason that seems to make people want to buy your product?
Why do people / consumers have to buy my product, not others?
If others can also bring a product like this, what other (unique) values do I have to add?

This problem often occurs in start up businessmen who own big capital since the beginning (either by selling the estate, or saving the salaries). When starting a business, the group got stuck in the construction of the system, without ever testing the market potential.

Directly into "Growing"

An example case that usually happens is, a business man jumping to the "growing" stage without building the system.

Let’s come back to the example I said before, about opening a seafood restaurant. When the cashier haven’t have a good system, then you duplicate up to 30 branches, then you are actually duplicate the 30 diseases.

You have to make sure the cashier working within the system, no longer only within the honesty. You have to make sure the transaction must be done in digital / computer. A cashier system which is connected with kitchen inventory. That's the system!

Many businessmen are pleased with the expansion and enlargement of the business, but without understanding that the risks can also participate in its expansion and enlargement.

Financing in Full Risk Phase

We have to understand that in the starting stage, a product is still testing the market, whether the value is accepted or not. What happens if you use the funds belonging to other parties in this phase?

It’s testing the market, which can run or stop. So, do not involve funds from third parties in the process of value validation. Use only pure funds you have, which have the lower risk. In other words, do not dare to owe (go into debt) at this early stage, because you still can not feel the business process well.


Difficulty in Developing Human

When businesses serve few people /consumers, of course we are still able to do it alone. But what if the market grow? Of course we need a team in this case.

Let's think together: your role as a business owner, have a high spirit in building a business, then what about those whom you hire every month with fixed salary? This is the challenge of a businessman: how to build a system that is fair and proper for team members, how to bring a team that has the specifications we require, how to build a positive work culture in the business organization.

I recommend you to read this article about understanding employee engagement levels.

It's getting to feel challenging, right?

5. Expansion without Research

Growing is about to expand and multiply the branch. Why are “expand” and “multiply”? Because there is a desire in business to serve the bigger / wider amount of the market.

Then the questions are:
Did the business organization conduct the market research?
Is the point of new branch placement has a potential market?
Does the position of new shop / outlet candidates have a promising traffic?
How much is the market potential in those new areas?

Discuss, think, and do it. I will share further posts on another occasion.
-Rendy Saputra, CEO of KeKe Group

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