|
The definition of the Abasia Point is the
inverse relationship between Total Revenue from Operation and
Net Profit Percentage. In other words, Net Profit Percentage
will shrink with an increase in Revenue. (Click
here for a picture
of the Abasia Point)
Signs of the Abasia Point
Signs that a company is
nearing the Abasia Point, include issues like; inability to grow the
company past current revenue, inability to attract and retain
good employees, inconsistent operational performance, out of
control accounts receivable and accounts payable, employees that
annually earn more than the owner(s), etc., etc. These are just some
examples.
Causes of the Abasia Point
In order to create a
successful business the owner must initially engage in three
different roles; the Expert, the Manager and the President. Most
companies start out expert centric. Lack of time is the most
common reason for neglecting the other two important roles. This
results in lack of planning and organization and results in
the company growing outside the scope of control. The Net Profitability percentage from operation
then decreases.
This is in parallel with the development stage of a company.
Development Phases of a
Company
There are five phases
of development of a company. The first three are
inherently different in nature than the last two. The first
three are linear and start with the Concept Phase. The second
stage is the Survival Phase that leads to the Transition Phase.
Typically the first three phases take about six to ten years.
The last two phases are circular in nature and and are the
Stabilization and the Growth Phase.
(Click here to see a
picture of the Five Phases)
BPS
You could compare us to a
GPS. We are like a Global Positioning System for a business, a
Business Positioning System. First we need to find where the
business currently stands. From there we can determine where the
business needs to be. With all the critical business element
analyzed we can map the preferred route to take with all the
necessary milestones in between. It allows for control of the
business to simply by knowing where it is and where the next
step will lead. |