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The 9 growth phases of a company

Like any other natural organism, companies too as organizations are subject to the laws of growth and decline: being born, growing, maturing, ageing and finally dying. But there is one big difference: in an organization, the heyday, i.e. the optimum composition of that organization, can be preserved on a permanent basis because the organs, i.e. the staff, amongst other things, define it with their style of thought and behavior. Alongside the company owner, who has the final say of course, they are the ones who determine whether the organization is healthy or unhealthy and thus contribute directly to the rise or fall of a company. Which phases are we familiar with in the natural growth of an organization? And which changes within a company are good or even dangerous and could lead to poor orders or the demise of the company in the worst case scenario? Each of the following 9 natural growth phases hides both risks and opportunities:
1. The company is born 
At the beginning, it is all about the idea, the belief and success. In this phase, an organization and/or the founder is driven by a vision and what they hope to achieve. In reality there is no market presence and revenue is low but things are beginning to happen. At this point the company is asking itself important questions like: “What exactly do we want?“, “What is our core business?“ and ”Who will do what?“.

2. The company in its infancy

The grand vision of the founder is still in evidence. At this point, results and therefore revenue are improving but liquid assets are still lacking, which is completely normal. The desire for an organization slowly takes hold. The founder is still very much on hand in this growth cycle and fully involved in events. But many a founder falls into the typical trap here: they spend money that does not actually belong to them. Employer’s liability insurance contributions, additional tax payments and advance tax collections can all lead to a premature end.

3. The company in its teens
Revenue continues to grow and it may even try something new for size, such as new equipment or premises. Like a teenager, the organization then displays this outwardly as well: the founder in particular revels in success and is all smiles in the face of each new challenge. This can often lead to high spirits and thereafter quickly to freefall. It is important here to have strategic plans in place and not to make impulsive decisions about the future of all areas and staff (organs) of the company.
4. The company in its youth
There are now independent departments (organs), which are successful within the organization irrespective of the founder. Consequently areas of responsibility are more clearly defined, there is more self-accountability on the part of employees and the quality of work improves. At this point, revenue is generally good if not very good and market presence has grown considerably. The organization is in demand and good employees approach the company of their own accord.
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 News - 24.04.2014
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