Where are you now?

MATURITY

The stabilization phase occurs when the revenue reflects no growth or decline apart from abnormal activity. Urgent intervention is required to restore the growth phase. The implementation should be aligned to fit the new strategy.
Risks during the maturity phase:

  • The effect of technology
  • Decreased profitability and reduction of positive cash flows as result of creeping costs
  • Overall stagnation mentality
  • Absence of creativity and innovation (Blinkers Syndrome)

GROWTH

The venture generates significant positive cash flows or earnings. This increases at significantly faster rates than the overall economy. The surplus funds generated during the growth phase, creates various reinvestment opportunities.
Risks during the growth phase:

  • Shareholders and Management tends to increase their financial exposure by taking uninformed investment decisions.
  • Unwarranted increases in fixed costs.

DECLINE

Management is the catalyst during the declining phase. A combination of factors may be responsible for the declining phase. Over leveraged conditions is undoubtedly a major contributor to distress.
Risks during the decline phase:

  • Ignorance of the market dynamics
  • Slow reaction leads to distress
  • Cannibalization of own resources
  • Difficulty in obtaining financial support
  • Filing for Business Rescue

START-UP

A business venture that is in its' inception stage of start-up activity. These entities are often funded by a combination of entrepreneurial founders, banks and financial lenders. Key to the start-up is the implementation of a well thought profitable and manageable Business Plan.
Risks during the start-up phase:

  • No Business Plan can foresee the unknown.
  • A dynamic phase with many variables that need constant management intervention.
  • The financial needs should be well planned and available resources should be accessible.

During their life cycle, all organisations are likely to experience some form of challenging situation or distress, early intervention is crucial to stay in control. We can provide support at any stage of the cycle, not just in times of financial distress.

The art of entrepreneurial problem solving does not depend on the related theory only , but rather on an inclusive combination of experience and analysis. Our philosophy of “nothing is impossible” allows us to convert the restricting challenges into opportunities.

Author Gerhard Vosloo CEO of BusinessWorx

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