A lot of theories have been propounded and even studies have been advanced on the
subject of business expansion. Researchs brings out the fact that every association
has its evolution and it builds up starting from a normal formation stage and progresses
into a mature stage. At every phase of its existence, the business will have
to experience upheavals. In most cases, success in business will only have
to be experienced by those business owners who have all the resources, the expertise
as well as the experienced required in sailing through financial difficulties.
The following lines will identify the various ways through which a business can
be financed as soon as it is set up and even right up to when it is fully established
in the market:
The Formative Phase of the Business
This is one of those very delicate stages in which every entrepreneur will want
to take all measures not only in making sure that the business takes off smoothly,
but to ensure that the business has come to stay for good. What every type
of business will need at this phase is a running capital and an appropriate administration
to take care of that capital. What should be observed at this phase of business
is that so many unforeseen circumstances may come up. It is for this reason
that enough capital should be hoarded to take care of any unforeseeable risk.
What the entrepreneur has individually gathered may not be enough. Therefore,
it is good that a resort to angel financing, venture capital, corporate venture
capital and loans is opted for. Keep in mind that once a business is at this
starting phase, it will need a lot of finance to surmount the odds often posed b
market forces or even from competitors. This is necessary for a continuous
operation.
The Business Flow Phase
This is phase where the business is already running and it is at least expected
that the inflow of money is certain. This is also a phase at which the entrepreneur
starts to develop some form of confidence that the business will thrive amidst the
odds. Although the entrepreneur will have some measure of satisfaction, there
is a need to obtain some form of security for the future of the business.
This is the main reason why much of what is received in the form of profits should
either be ploughed back into the business or should be used to acquire some fixed
capital that the business can rely on in the future. The business can also
use this to employ more qualified staff.
The Youthful Phase
This is a phase in which the business will experience a lot of unpredictable circumstances.
It should be noted that growth in the business will still be experienced, but this
will not be stable. It is certain that at this phase, the business will already
have made some significant amount of savings. It must also have gained some
standing within the business environment and can conveniently surmount any hurdle
within the business environment. The money that has been saved should therefore
be taken to counter any shortcoming. But the entrepreneur should also make
sure that the business can first of all rely on what it has kept in stock rather
than seek for external help.
The Mature Phase
This is a phase in which almost everything is certain. Every objective must
have been put in place and every priority must have been identified. Growth
or expansion at this stage should be maintained to remain stable. The business
should also seek for means of spreading out its risk by opening up to possible investors.
Also remember that this is the stage in which financing becomes much easier
to obtain. This is because the business must have developed some credit worthiness.
An understanding and appreciation of all the phases that your business goes through
is important if you have to maintain its growth or develop ways to compete within
the business environment.