Evolution of company development: from startup to corporation.
Human is so constructed that whenever possible he tries to structure and systematize everything. This is a useful skill, because with the huge amounts of information that any person processes in modern realities, it becomes more difficult to use them for achieving results.
The same story is with companies and businesses. There are a lot of different classifications, which usually describe the functionality of a particular type of company, but do not affect the architecture. It is difficult and costly to customize and improve the functionality without established and clear structure within company.
We can say for sure that outside the classifications, each company goes through three main stages in development and scaling. It is generally accepted that with each stage business is gaining momentum, replenishing a staff with new specialists. It transforms and moves to a qualitatively new level.
- Company of 1-5 employees – as a rule, this composition is typical for start-up or for company at the founding stage with a minimum set of resources. Here money turnover is modest, but with profit of 15% to 55%.
- Company of 5-50 employees – an organization with extended recruitment of specialists, where financial turnover is much higher than at the previous stage. The problem with such business is dependence on its own growth. It is more and more overgrown with functionality and operational routine. As a result, the profit is 5-15%, and the rest of resources are donated for this profit.
- Company of 50+ employees – a wealthy business that often boasts a multi-branch structure and international coverage. It acquires such wide functionality that every failure of erp- or crm-system brings it to its knees. The percentage of profit, in aggregate of various factors, does not exceed 1-5% of turnover, and 95-99% of all resources are spent on making the business work and making a profit.
Problems that hinder business growth and development.
The more turnover in a company, the wider the functionality becomes. This entails problems, and such a fact cannot be disputed. But the main problem for most large companies is that any operational or structural change is difficult to implement, or even unrealistic. The functionality becomes multi-level – it does not allow getting to the foundation. Schematically it looks like this.
This problem has other negative consequences for company. Market becomes unstable, experienced players dictate conditions to newcomers, and sometimes there is no healthy competition. But all these above are problems that have turned into natural processes and business has to get along with its.
We thoroughly studied the analytics and brought out three main patterns that apply to both startups and corporations. They really hinder development and scale:
First problem: 90% of companies do not move to the third stage (50+ employees) and fade away (or start all over again). The reasons may be different: weak system, conservative management, hiring “wrong” employees for company. The incorrect company architecture is one of key reasons that becomes a stumbling block in scaling.
Consequences of the first problem:
- constant search for the “right” niche where business can establish itself and move to the third stage
- system failures are inevitable, which paralyze the entire company's work
- poor understanding between company's owner and management team
- new staff do not receive proper support while adapting to workplaces, and the company suffers from it
Second problem: with each stage, the percentage of profit decreases, and the percentage of resource consumption increases. 95-99% of burnt resources bring a minimum profit of 1-5%. But even a small percentage of profit is acceptable (high turnover = big money). But what if the consumption of resources is reduced while the company's profits remain the same?
Due to a lack of understanding of this basic pattern:
- it is extremely difficult for business to scale, as there are too many routine operations
- business owner does not even realize that it is possible to optimize the work and resource costs so that the profit increases to 10-15%
- resources of not only the company, but also the hole planet are thoughtlessly burned (according to mathematical calculations, today's concept of a comfortable life will go down in history in 30-35 years)
Third problem: it takes a lot of time and effort to reach the third stage of development: according to statistics, owners of such businesses are usually over 40 years old. A stereotype is formed that young ideological people cannot achieve success in business.
This can lead to:
- poor progress in new technologies and trends
- methods of maintenance and management are not being improved
- not enough enthusiasm and creativity
Troubleshooting with the Vymex System.
Implementation and configuration of the operating system is one of mandatory tasks that awaits any business: someone does it at the launch stage, and someone does it over time. Someone postpones this task until the moment, when the company begins to "choke" in its own routine. Strategic leaders with an analytical mindset do it in other way: they lay the company's architecture at the first stage of development, when there are no more than 5 people in team.
There are no more than 10% of such managers and companies on market. They do platonic work at the start, and then customize and tune the processes with minimal loss of resources. Modern operating systems do not possess such an architectural solution, with the exception of Vymex – here the entire scope of work is laid inside by default.
With help of mathematically correct calculations and the built-in architecture that fits into any business, Vymex created the system – it gives an understanding of how results are formed. This allows you to simply and effectively influence on them, manage, and as a result – do it with less loss of resources and with an increase in the company's income. For this, a team of developers, engineers, designers was formed with one goal – to create a mobile application into which an innovative system can be sewn.
Due to this solution from Vymex, three business problems have been significantly leveled, and owners of young and proactive companies will have the opportunity not to be distracted by routine processes and focus on global goals.
