The economies of the world have taken a battering and many scaled down to survive, but the times are changing to back to normal and growth should be on your mind. Partly because the weather is changing and the wonderful season of spring is near when plants make their dramatic growth spurts to get through the sunny months of summer. In terms of business According to a Les Mack on the Inc website (you can watch the video) all business are either in the growth or decline stage. The goal of every business is to sell to a profitable, sustainable market.

Step 1 – start a business for a very specific thing in a profitable, sustainable market. If you do this you have a business, if not it is a hobby. This is the reason why 80% of new businesses fail, they do not have a profitable sustainable business.

Step 2 is fun. You have found the profitable, sustainable business and you sell more. The answer to everything is to sell more and it is relatively easy. At this stage the person who had the vision to start the business and the employees (operators to get it done) are in synch. They can handle the problems and enjoy working together.

Stage 3 is white water.  The business is becoming complex and layers of management develop because the business is becoming complex. The improvisation of the past does not cut it anymore because systems and processes are needed to operate the business. It should be noted visionaries tend not to like systems; processors do not like improv.

Stage 4 is predictable success. The growth of the company means the company needs to hire another senior manager who will predictably not know the visionary but will be great with systems. This will cause conflict between the visionary and the earlier people who may not have the title but have the relationship between each other to solve problems.  There are two possible pathways at this stage – scale up or do not scale up. Scale up means to go regional or national in scope. Not to scale up means to stay more local, each has its plus and minus points or there is no right answer.

Stage 5 is treadmill. This means as the company goes further more systems and processing is done.

Stage 6 is the big rut. The company drifts for a long time because it has lost the ability to self diagnosis.

Stage 7 is the death rattle. Eventually the company goes out of business and its assets are sold off.

Linking to dividend paying stocks, most of the time the companies are in the stage 4 area because they have a profitable sustainable market which allows the company to generate cash flow to pay back the investors. Start ups are about stage one companies, mature companies must pay attention to start ups because the visionaries see market opportunities everywhere. Mature companies are very good at protecting their turf which is good for dividend holders and that is why mature companies buy start ups – they are not very good at start ups because of the processes and systems in place or bureaucracy to run the company smoothly. One of the things you should look for in your company is what companies have they bought.

There are more questions than answers, till the next time – to raising questions.