Examine five stages that are involved in the pre-start-up phase of a new business venture.

Stages involved in the pre-startup phase of a new business venture

i. Idea Generation stage

This is the preliminary stage for the business. Here, the entrepreneur does a lot of ground work to access the viability of the venture he is about to get into. At this stage, the entrepreneur is expected to come up with the business idea. Several needs may require to be fulfilled but the entrepreneur may not meet all of them; it becomes necessary at this stage to select the most viable business idea from the many available.
This stage may involve creativity and assessment of various ideas. It is at this stage that an entrepreneur decides on the business mission, scope and direction. This mean, an entrepreneur gives the prospective business a purpose. Some purposes may include provision of quality goods and services and to make profit
He will carry out due diligence to ensure he has taken all important factors into Recount setting off the business. He will incur expenses to execute some of these important activities. He may for instance require the services of a legal representative to acquire land. He may also hire the services of a surveyor if he wants to build his own premise, if he will hire personnel to assist in running the business, he should ensure that he has sufficient funds to pay them for at least 6 months. He may need to get a loan to do this.

ii. Start - up stage

Activities at the start up stage may involve preparation of a formal business plan, registration of the business, sourcing capital, recruiting staff and designing the product. At this stage, business may also launch the product and sign up with distributors or dealers.
At this stage, the entrepreneur has already set the business up. The business is operational despite the setbacks that befall all businesses that start up at the initial stages. The entrepreneur realizes that he may need to make adjustments in order to survive. He may see the need to insure the property in case he hadn't He may also realize that he does not need an extra staff hence he may cut down on that, sales may be slow in picking up, so he may decide to come up with new marketing strategies, He may see the need to have proper records for tax purposes

iii. Growth stage

- At the growth stage of business common experiences may include:
- Increased sales and profits
- Wider market coverage in terms of geographical regions.
- A growing number of employees
- Variety of products/services
- Increased competition
- Need for additional expenditure
During this phase, the business will experience rapid growth as customers‘ needs become the main focus for the entrepreneur. It is at this stage that he will realize there is need to gain a competitive edge in order to make more sales. The entrepreneur at this stage may think seriously about automating his operations, hiring professionals like accountants, perhaps even expanding the business. The signs that these requirements are necessary will be felt by the growing need to meet the increasing and dynamic needs of the customer

iv. Stabilization Stage

At this stage, the business sales and profits stagnate. The business may also experience intensified competition.
- There is also market saturation by similar (?look like?) products
- Consumers‘ indifference to the-product
- Sales may decline and consequently profit may decline.
This is the phase that determines whether the business has managed to meet its long term objectives and a period to assess how successful the short term objectives have been met. At this stage, the entrepreneur is more concerned about corporate governance, issues and how this impacts on customer needs. He will also be concerned with the management of the business in various departments such as finance, sales and marketing. The entrepreneur will have his sights on a higher level of competition with other, firms that belong to a higher circle, hence he see the need of turning the business into a public limited company in order to compete as such levels.
This model can be applied to the growth or otherwise of a firm. The entrepreneur thus needs to ensure that the business opportunity he has before him has a road map charted in advance and based on due diligence. This does not mean that every firm will follow the above model. The entrepreneur needs to be aware of the possible outcomes

v. Innovation Stage

Organizations that fail to innovate at stabilization stage are likely to decline. To ensure the firm comes back to growth, the entrepreneur is required to re- look at the ways business has been conducted. The aim is to undertake activities differently and rescue the firm from decline. It is expected that innovative strategies would ensure accelerated growth.

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marto answered the question on January 30, 2019 at 09:05