Introduction to Stage 6 – Success
Entrepreneurs at this stage have a number of options: capitalise on the company’s accomplishments, expand or, keep the company stable and profitable. The entrepreneur has a number of ways to capitalise, from exiting to taking a dividend from the business. If the entrepreneur wants to expand (Baum et al., 2001; Rae, 2012) then the core tasks are to make sure the basic organisation stays profitable so that it will not outrun its source of cash and, to develop managers to meet the needs of the growing organisation. Through the entrepreneurs leadership all managers within the business should now identify with the company’s future opportunities rather than its current condition demonstrating a success to its stakeholders. The entrepreneurs’ focal competency is operational and financial planning.
Success Stage Compendium
The success stage, also known as the “Take-off” or “Growth” stage in some models, is a critical phase in the lifecycle of a business. During this stage, a business has already established its position in the market and aims to expand further. The process of discovering a valid business idea continues even as the business grows. Here’s an exploration of this process in the success stage, substantiated by academic references and global examples.
- Market Expansion:
- In the success stage, businesses look to expand their market reach. Companies like Airbnb and Uber exploited digital platforms to access global markets quickly (Gobble, 2018). Through market expansion, they validated the scalability of their business ideas.
- Product Diversification:
- Diversification is often a sign of a successful business. Apple Inc., for instance, has continuously diversified its product range from computers to mobile devices, and now services like Apple Music and Apple TV+.
- Customer Feedback Loop:
- Successful businesses establish a feedback loop with customers to iterate and improve their offerings. Amazon’s relentless focus on customer feedback is well-documented and has been a key factor in its continuous idea validation and business growth (Hallowell, 1996).
- Investment in Research and Development (R&D):
- Investing in R&D is crucial for sustaining success. Companies like Samsung allocate a significant portion of their revenue to R&D to explore new business ideas and stay competitive (Lee, et al., 2019).
- Strategic Partnerships:
- Forming strategic partnerships can validate and enhance a business idea. For example, Spotify’s partnerships with various record labels have been crucial for its success and continuous growth.
- Sustainability and Social Responsibility:
- Businesses in the success stage often integrate sustainability and social responsibility as part of their business model. Unilever’s Sustainable Living Plan is a prime example of how sustainability can be intertwined with business success (Whelan & Fink, 2016).
- Talent Acquisition and Retention:
- Acquiring and retaining the right talent is essential for continuous growth and idea validation. Google’s emphasis on hiring the right people has been a cornerstone of its success.
- Technological Adoption and Innovation:
- Embracing technological innovations is vital. Companies like Tesla continuously innovate by adopting the latest technologies, thereby validating and evolving their business ideas.
- Financial Management:
- Sound financial management ensures that the business remains profitable and continues to grow. By achieving financial stability, businesses have more resources to explore and validate new ideas.
- Competitor Analysis:
- Keeping a close eye on competitors and the market trends helps in discovering valid business ideas. Businesses can learn from the successes and failures of others.
Each of these aspects plays a significant role in the process of discovering and validating business ideas during the success stage of a business lifecycle. Through strategic actions in these areas, entrepreneurs can ensure that their businesses continue to grow and evolve in a sustainable and profitable manner.
Entrepreneur Tips
These five tips emphasize a balanced approach focusing on financial management, customer engagement, diversification, and strategic partnerships which are essential to navigating the success stage effectively. By adhering to these guidelines, entrepreneurs can continue to validate and refine their business ideas, ensuring sustained growth and success in this pivotal stage of the business lifecycle.
- Maintain Financial Discipline:
- As your business grows, it’s crucial to maintain financial discipline to ensure sustainability. Monitor your cash flow, expenditures, and profitability to make well-informed financial decisions. Consider consulting with financial advisors to manage your finances effectively.
- Invest in Research and Development (R&D):
- Continual investment in R&D can foster innovation and help in discovering new avenues for growth. It also aids in staying ahead of the competition and adapting to market changes. The insights gained from R&D can be invaluable in validating new business ideas and strategies.
- Cultivate a Customer-centric Culture:
- Keeping a pulse on your customers’ needs and feedback is critical for ongoing success. Engage with your customers, seek their feedback, and strive to enhance their experience with your products or services. A customer-centric approach can lead to better product development and market understanding.
- Diversify Your Offerings:
- Diversification can mitigate risks and open up new revenue streams. Consider exploring new markets, product lines, or services that align with your business’s core competencies. This diversification can also lead to the discovery of new, valid business ideas that can propel your business forward.
- Build Strategic Partnerships:
- Forming strategic partnerships can provide access to new customers, technologies, and markets. Look for partnerships that complement your business and can lead to mutual growth. Through strategic collaborations, you can validate new business concepts and gain insights into emerging market trends.
Further Reading
View the original paper here, and the blogs in this series:
9 Stages of Enterprise Creation: Stage 1 – Discovery
9 Stages of Enterprise Creation: Stage 2 – Modeling
9 Stages of Enterprise Creation: Stage 3 – Startup
9 Stages of Enterprise Creation: Stage 4 – Existence
9 Stages of Enterprise Creation: Stage 5 – Survival
9 Stages of Enterprise Creation: Stage 6 – Discovery
9 Stages of Enterprise Creation: Stage 7 – Adaptation
9 Stages of Enterprise Creation: Stage 8 – Independence
9 Stages of Enterprise Creation: Stage 9 – Exit