How Businesses Evolve

What you knew could get where you are, but will not get you to the next level. You need to master the art of deliberately unlearning what you know and gaining a new set skills. There are several stages of business growth. Many small businesses either die or get stuck at the first or second stage. These stages include:

  1. Cash flow Creation
  2. Cash flow Sustenance
  3. Cash flow Growth

Stage One: Cash Flow Generation

In this stage, you have this amazing idea of how you are going to make a lot of money. Note all business plans show a positive cash flow. No founder has ever said, “my business will not make money.” So the entrepreneur is trying to live up to his business plan of making cash. Some are unable to make money or enough money.

Stage Two: Cash Flow Sustenance

The entrepreneur at this phase has bills to pay, rent, salaries, debts and suppliers. Figuring out how to settle his bills when the need arises can keep the entrepreneur stuck in this phase if growth is not taken seriously. Many business leaders are preoccupied with keeping costs low in order to be profitable but not expanding the business and improving the systems . Most businesses either shut down, grow or remain at this phase where they are struggling to cover their costs

Stage Three: Cash Flow Growth  

The business has gone from struggling to survive to growth. A business can only get to this phase if it used its resources well and devoted enough attention to marketing and being out there in the face of customers. The focus should not be survival but becoming a market leader for the product or services you are offering. This separates a stage two and stage three entrepreneur.

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