In starting and growing a business, there are various stages/phases it must pass through. These stages begin right from the time the business idea came to mind and you considered starting it.
There are generally 5 stages every successful business must pass through right from the idea stage to the maturity stage. As a fashion entrepreneur, it is important that you know what these different stages are and that you can identify what stage in the business lifecycle your fashion business is in.
Before we go in, let’s first understand what a business life cycle is.
What is the Business Life Cycle?
The business life cycle is the progression of business in phases over time. It consists of the phases a business must pass through over time.
It is important for fashion entrepreneurs to properly identify what stage their business is in so they can plan and establish achievable goals for the future.
The 5 Stages of a Business Life Cycle
1. Idea Stage
Since no business can start without an idea being planted in the mind of the business owner, this is the first stage of the business life cycle. At this stage, the idea is just growing and not fully formed yet.
This is the stage where research on the viability of the business should be done. This is the stage where questions should be asked and information gathered on whether or not your business idea will be accepted by potential clients.
At this point, you, as the business owner, should be looking at what the market is telling you about your idea. This is the stage where market research is carried out and a business plan is drawn up if the business idea seems viable. Plans on how to fund the business should also be decided here too.
2. Startup Stage
Now that you have realised that your fashion business idea is viable, it is time to set it up. The startup stage is considered the riskiest stage in business growth by many as this is a new territory for you.
At this stage, you have to be open to feedback from customers and constructive criticism. Here, you will be making a lot of changes to your fashion products based on the feedback you get from customers.
Making a profit while in the startup stage is not very likely because you are still trying to build your customer base and come up with a business model that works. Most businesses run at a loss at this stage. This is the stage where your business needs just essential staff and no one else.
At this stage also, marketing your business to your target audience by advertising the solutions and new benefits your business brings to them should be taken as a priority. Registering your fashion business is very important in this stage as it will make it a legal entity recognised by the law.
3. Growth Stage
At the growth stage, the business is establishing a solid identity for itself and customers are steadily increasing. Sales are also increasing and the business begins to make a profit.
Now, customers begin to market your brand for you and you can afford to hire more staff without worrying about whether they’ll stay with you or not. The goal st this stage is to further boost revenue and increase profit.
At this stage, competitors begin to catch up with you and you must begin to implement methodologies and strategies that have worked for you in the past. This is also the time to begin to look inwards and build/invest in your employees.
Marketing should not be overlooked in this stage as it will contribute greatly to the growth fo your business.
4. Expansion Stage
At this stage, your business has become established in the fashion industry and people know about you. This is the stage where revenue and cash flow increases rapidly.
Now, you have a solid workforce and it is time to start looking to go into new territories and expand your business operations. This is the best time to leverage the proven sales models, marketing models, and operation models from your growth stage.
It is tempting to become complacent at this point and to feel like you don’t really need to put in much effort to run the business again but nothing can be further from the truth. In looking into new territories to expand your business, it is important to study them well and know that the fact that certain methods worked before does not mean they will work again.
5. Maturity Stage
At this stage, your fashion brand has made its mark on the fashion industry and the business is now recognised by many. Your business can use the brand recognition it has to enter into new markets more easily than others.
However, the business also reaches a kind of plateau with revenue and cash flow slowing down. The business will still be making a profit but not at the rate at which it was doing so in the expansion stage.
Your business might still be growing but not at the rate at which it was growing before. Competitors have also most likely caught up with you and it is time to make certain decisions.
As the business owner, this is the stage where you decide whether to renew your business, by expanding into newer territories or to end the business by cashing out. Before renewing, however, you need to ask yourself the same questions you asked at the startup stage to see if the new business idea is viable and if your business can stand a failed business venture.
While some fashion businesses never get to see all of these stages, some others do and grow into world-class businesses that change the face of fashion everywhere. You decide how far your fashion business will go.