A business must evolve in order to survive. From the early days when the founder of the company used a StarTAC or a Blackberry to the second or third generation, the founder’s relationship with his or her children is the primary factor for the success of the business. The second and third generations tend to be made up of spouses, siblings, and children, as well as grandparents. Researchers looked at the evolutionary literature and developed propositions about the relational dynamics in family businesses.
Today, the scope of business is immense. Many businesses started as local or virtual enterprises that did not have a physical location at the beginning. The stages of a business are like a ladder – local, regional, national, and global. As a business grows and expands, its scale increases. It becomes more sophisticated and diversified. It may also be a global or multinational company. But before it can grow to these levels, it must first have a local presence.
The first stage of a business’ evolution involves hiring an Oracle. Like an Oracle, this charismatic and eccentric individual plays a key role during stage one. However, it is important to remember that Oracles have limited business acumen. As a result, they often end up being highly technical. However, they are an essential part of a business. The Oracles of a business often lack the business acumen to make the business a success.
As a business grows, its values and motives change. The founders’ goals may shift from personal passion projects to business-oriented pursuits. Some businesses evolve into offensive postures in order to build wealth, while others become defensive in order to protect it. Without a second wave, they may eventually stall or shut down. Regardless of the type of business, it is essential for the founder and the leadership to continually adapt to these changes.
The next stage is called the “growth phase.” In this stage, the business has achieved market acceptance and revenue visibility. This stage also marks the beginning of the cash flow generation phase, during which heavy investments are made by investors and financial institutions. As the growth continues, the company’s financial metrics improve tremendously. Nevertheless, many businesses will not make it past the startup stage. In other words, there are a number of critical aspects to consider.