Features November 2017

From Seed to Flower, a Look at Corporate Lifecycles


Written By: Savannah Edgens

Starting a business can be difficult. Corporations, as described by Entrepreneur, are divided into five different lifecycle stages. The lifecycles of corporations are followed from their inception to their end. Each stage of the corporate lifecycle identifies different obstacles and challenges. Take a look at the five stages of maturity.

Stage One: The Idea

Every business starts with an idea. This is the stage where individuals seek advice and counseling from mentors in their industry. It’s the stage where they plan what they want their brand to be and how best to communicate that brand. This first stage is considered to be the soul-searching stage.

Santa Fe College, in Gainesville, has a business incubation program to help local entrepreneurs get their businesses to stage two. It provides training programs to assist with any challenges experienced during stage one; the program serves Alachua and Bradford Counties.

Stage Two: Startup

This is the maiden voyage of the business idea from stage one. It’s the exposition, or uphill climb, of a good story. This can be the riskiest stage of business, which is the primary reason why 25 percent of startups do not make it five years. In this phase of the corporate lifecycle, adaptability is essential. This is where individuals are working extra hours just to maintain their business, and every decision that is made is crucial to the future of the business.

This Darwinian “survival of the fittest” scenario makes the budding enterprise dependent on the CEO, according to Communication Works. In the startup stage, there are usually

1 to 10 employees who are tasked with various jobs; these jobs may not be heavily focused or specialized. The biggest challenge experienced in this phase of the growth cycle is cash flow, which is why the CEO spends about 90 percent time is spent as the technician and engineer while the remaining 10 percent is spent as the manager.

Feathr is a local business in Gainesville that specializes in event planning. The company strives to create personalized event experiences through data insights and communication, according to the company’s website, Feather.co. Chris Hillman, a writer for Feathr, still considers the company a startup even though it was founded in 2012 by Aidan Augustin and Aleksander Levental. Feathr is still a young enterprise, and it is in the early phases of stage three.

Stage Three: Growth

This is the stage where the business should be bringing in a steady income. This stage also brings new demands as far as revenue increases, which require more staffing, about 11-19 employees now, to meet the steady demands of the company. This typically proves to be the biggest challenge in this stage of corporate lifecycles. Leadership is essential during this stage, as well.

It is important for the founder to step into their role and manage the growing corporation. While the company is still dependent on the CEO, the CEO can now start to see their vision taking shape.

Delegation of tasks will become more evident, employees will have more specialized jobs, and the biggest challenges faced in this stage of growth are hiring quality employees and improving sales. Diversification will become a bigger component, as well.

Continuing our analysis of Feathr, its five years of operation have given its founders experiences in moving and working through challenges associated with beginning companies. Feathr has hosted events in major cities such as Dallas and New York City, and the company has gone through two cross country moves.

Stage Four: Expansion

At this phase of the corporate lifecycle, things should feel routine. The staff should be equipped to handle more responsibility, and they should be managing areas that the leader no longer has time to cover. This is the point where many companies seek to broaden their horizons by offering more services to build capital.

The CEO has now become more of a leader whose energy and passion keep the organization thriving. There should be about 20-34 employees, and there should be less of a struggle to hold things together. The biggest challenges, at this point, are staff buy-ins and communication gaps.

It is especially important that all decisions have the business moving forward. Taking backward directions can make the company seem dull, and it can lead to bankruptcy from lack of clientele. One common problem budding corporations have is taking on too much work. When the work load becomes too much for the staff to handle, the company can drown. It helps to weigh the costs and benefits with any risks and challenges that occur so the company can best decide how to proceed.

In July, Feathr outgrew its first office space on Southwest Sixth Street, and the company began its expansion within Gainesville. The second office space hired 13 new staff members, and the new office location is on West University Avenue.

Stage Five: Maturity and Possible Exit

It’s time for the CEO to listen to their staff. If some of the original passion has left the enterprise, then it’s time to consider how to bring it back. The biggest challenges facing a CEO, in this stage, are products not being differentiated and inadequate profits.

At this stage, the corporation should be bringing in a steady profit on a yearly basis (with about 150-500 staff members). Decisions should be made about the company’s future. If the business is doing well, it might be wise to consider expansion. However, if it feels like the business is still stuck in stage two or three, then it might be time to consider termination of the organization.

Each of these scenarios should be heavily considered because they bring their own risks and challenges to the table. Selling the business could be a possible solution, as well. A partial sale could keep the original founders in the loop while offering another source of income and fresh perspective for the company.

Feathr has managed to move its way through the corporate lifecycles, and it still needs time to mature into a bigger corporation. However, with the company’s current status, it looks more likely that it will continue to grow and expand its horizons.

 

SAVANNAH EDGENS is a Journalism senior at the University of Florida. While her interests vary from politics to entertainment, she is best known among her friends for her ability to quote movies. When she’s not writing, Savannah enjoys a good book or movie and a cup of coffee.

 

 

 

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