Stage III:
The Metamorphic Stage
In geology, metamorphic rock is rock that has undergone structural changes as a result of experiencing heat and pressure. In the world of business, the same concept is true. Many times, a business will undergo significant structural change because of financial and economic pressures.
You are in The Metamorphic Stagewhen your business begins making fundamental structural changes in response to financial pressures. For example, cutting back staff, downsizing office space etc. It is really a tell-tale sign of business contraction when the changes a business makes have negative effects on growth but the business has no choice because of financial pressures. For example, we consulted with a clinic that had to lay off some of its physicians and nurses. Medical staff like doctors and nurses are the ones that produce revenue for a clinic but because the clinic’s cash flow had deteriorated they simply were forced to make these cuts.
4 Indicators your Business May Be in the Metamorphic Stage
- Cutback on staff
- Downsizing space
- Losing major contracts because you don’t have enough money to meet fulfill the contract.
- Extending terms of debt repayment – longer terms = increased interest.