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| Headshift business card discussion (Photo credit: Lars Plougmann) |
The
Four Stages of Growth
by Michelle Nascimento
From
opening a small business to becoming a major corporation there are
certain steps involved. There are four stages of growth a successful
small business will ultimately go through as it matures. The four
stages are discussed in the following text.
Stage
1 is the proprietorship. This is a business that is completely run by
one person or a family. The owner themselves complete all operations
of keeping the business running. A good example of this would be my
handmade jewelry shop with Etsy as my venue. I have been an Etsy
seller for about 3 years now. I run every aspect of my jewelry shop
from the creation of my items, to photography and listing, to
marketing to shipping. I have complete control over changes that need
to be made and am responsible for all tasks that need to be
completed. I receive all profit that is made but am also responsible
for any debts incurred. “An owner-manager, a group of partners or
the members of a family dynasty dominate most small businesses.”
(Roper, S. 1999. p. 235)
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| The Etsy office's community workspace area. (Photo credit: Wikipedia) |
Once
the proprietorship has been established to a certain extent it may be
time to hire. Expansion is a big step for all small businesses. Stage
2 consists of hiring an employee or employees to assist with day to
day tasks. The employee(s) and owner now work together in order to
complete tasks. This also gives the owner time to focus on other
responsibilities such as hiring more workers and other managerial
duties. “[S]mall businesses are more challenged than large
companies by resource constraints such as access to financial
capital, and technical or managerial skills, which often
significantly reduce the number and type of options available to
management (Hodgetts and Kuratko 2001). This is a very challenging
goal for a small business owner because of the limited resources.
However with confidence, innovation and the right product or
specialty growth can be obtained.
The
3rd Stage of growth comes when “firms reach a major milestone in
organizational development when they add an additional level of
supervision.”
(McCubbrey, D.J.) Business has expanded and the need for even more
employees has risen. The owner still has a part in day to day tasks
but focuses primarily on organizing management tiers and overall
business operations. A chain of command is created and all duties
trickle down from owner to manager to employee. The next stage in
development is a littler more complex in that it adds more management
where necessary as well as documentation. Aspects of everyday
business tasks, budgets, job descriptions and policies are
documented. The documentation assists in training new employees and
duplication (starting new like businesses).
References
Hodgetts,
R. M., and Kuratko, D. F. Effective Small Business Management,
Harcourt College, Fort Worth, TX, 2001.
McCubbrey,
D.J., (2009). Business fundamentals. Retrieved from:
http://www.textbookequity.org/oct/Textbooks/McCubbrey_BusinessFundamentals.pdf
Roper,
S. (1999). Modelling small business growth and profitability. Small
Business Economics, 13.3. 235-252.
