Business Lifecycle - Creation And Growth
In most cases, businesses start out as small ventures funded by government. A new business attempts to develop and market a good or service on as small a scale as possible. People who are interested in developing and running a business apply to the government for a grant to launch their idea. The cheaper the business’s launch plans are, the less evidence the government asks for to show that the idea is viable. I envision the government having a number of grant programs that fund projects of different scales. Each has a budget and criteria for selecting ideas to fund. New businesses are created by people with ideas they want to develop, supported by government funding.
If a small business consistently has trouble meeting demand for its products, it needs to expand. It does this by applying for another government grant. The track record of the business, including records of sales, helps the government evaluate the request for funding to expand. Unless there is strong evidence of a huge backlog of unmet demand, business expansions are done incrementally. Perhaps production is at most doubled in each expansion. The scrutiny would be similar to what banks do now when considering making loans to business.
Once a business reaches a size where it can meet the demand for its products, it is responsible for maintaining and replacing its machinery and equipment. It needs to set prices high enough to cover all of the costs of staying in operation indefinitely. Businesses are expected to accumulate funds over time to cover big, but infrequent expenses, like replacing machinery.
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