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Why paying attention to where you are in the business lifecycle will help you - part 2

Written by: Mark Gwilliam

Article Overview: My previous article looked at the traits of a business that has just begun, may be with just a thought, and how it moves into a start-up phase. This article looks at the next 2 phases as the business begins to take shape and grow, then reaching maturity.

Why paying attention to where you are in the business lifecycle will help you - part 2

3. Growth phase

Your business has made it through its infancy and is now a child. Revenues and customers are increasing with many new opportunities and issues. Profits are strong, but competition is emerging. The biggest challenge growth companies face is dealing with the constant range of issues bidding for more time and money.

Effective management is required and a possible new business plan. Learn how to train and delegate to overcome this stage of development. Growth life cycle businesses are focused on running the business in a more formal fashion to deal with increased sales and customers.

Better accounting and management systems will have to be set-up. New employees will have to be hired to deal with the influx of business. Money may be sourced from banks, profits, partnerships, grants and leasing options.At the Growth phase, you’re making your climb to the top. The market is beginning to know your name and so are your competitors.

Demand for your products and services are increasing, maybe at a faster rate than you can deliver. It’s an exciting, fast-paced time. It’s often easier to focus on new customers and customers than on re-evaluating the systems and procedures you put in place months or years ago.

Are they still adequate for your current needs and future projections? Do you have the financing in place to match your growth? Has your strategic planning process kept pace? Are your benefits plans designed to attract, motivate and keep good talent? What are your next steps?

4. Maturity phase

Your business has now matured into a thriving company with a place in the market and loyal customers. Sales growth is not explosive but manageable. Business life has become more routine. It is far too easy to rest on your laurels during this life stage.

You have worked hard and have earned a rest but the marketplace is relentless and competitive.Stay focused on the bigger picture. Issues like the economy, competitors or changing customer tastes can quickly end all you have work for. A mature cycle company will be focused on improvement and productivity.

To compete in an established market, you will require better business practices along with automation and outsourcing to improve productivity. Funding is likely to come from profits, banks, investors and government.You’ve made it to the top! Your financial position is strong, your team is experienced and your operations are stable. But staying on top creates a whole new set of challenges.

At this point in your business life cycle you may want to investigate mergers and acquisitions, look at more sophisticated financial and compensation planning, minimise risk and liability, or conduct trend analysis to discover new ways to expand and grow your business.

This is a time for major decisions. The decisions you make now will produce the results you need to prepare you for the next leg of your journey expansion and transition.

Each stage of the business life cycle may not occur in chronological order. Some businesses may quickly move through each life-cycle phase; some may skip some out all together. Many business owners will choose to avoid expansion and stay in the mature life-cycle stage.

Whether your business is a glowing success or a dismal failure depends on your ability to adapt to its changing life cycles. What you focus on and overcome today will change in the future. Understanding where your business fits on the life-cycle will help you foresee upcoming challenges and make the best business decisions.

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Article Tags: business Money, Growth phase, new business plan



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Simple contest? - I agree with Brandon. It would be better I think to have a smaller contest to start off and show some appreciation for the people who are posting on the Forums (and not paying attention in class to do so!). can we do a marketing competition on a small scale or do something in the forums?
30 sec elevator pitch - I usually don't start with my name as it's usually on my name tag. I start the introduction with a benefit statement that speaks to the group. e.g. a business coach at the table could start by saying "I teach stressed out business leaders and professionals how be more profitable by working less and enjoy life in the process." this catches their attention to followup with me later and qualifies them to me as something I said catches their attention. You could finish off with another quick sentence stating your solution and that your business can help. You can also finish off with what Kevin said - what you are looking to accomplish at the networking event, what you are looking for to help you in your business etc. Basically these are elements of a "30 sec elevator speech". You can also use it while your meeting one-on-one at an event but I would focus your attention on helping the person your speaking too.. eg. If there was someone I could introduce you too who would that be or what can they provide you?
Re: Non Paying Clients - [quote="SageMediaDesign":3bsy6jfp] Another hard lesson led us to require all work orders and revisions in writing. You learn as you go along.[/quote:3bsy6jfp] That's great, I'd actually never thought of that, do you have any scenarios to tell us where a business owner has told you over the phone the changes they would like and then refused to pay? [quote="SageMediaDesign":3bsy6jfp] Some people balk at the idea of paying anything upfront, so you do lose a bit of business, but I suppose these would be the same people who don't understand that what they're paying for doesn't quite work like picking a box off the shelf... retailers can simply re-sell a returned item. Service providers like us can never get that time back, and we can't resell bespoke design work.[/quote:3bsy6jfp] I totally agree with this and support you in what you're doing. Another tip is for them to sign a legal contract and then if they don't pay refer them to a debt recovery agency but it's a lot of work for a small business and something you should not have to deal with. [quote="SageMediaDesign":3bsy6jfp] Luckily these clients are few and very far between. I've found that the deposit requirement has actually (for the most part) weeded this type of customer out from the outset.[/quote:3bsy6jfp] In retrospect other businesses don't let you have things for free, like you can't buy a car and if you don't like it down the track you don't have to pay for it, you pay for it either way. I also dislike working with people who don't know what they're paying for too, such as believing the installation of a shopping cart or content management system can be easily added on at no extra cost. Fortunately for me these clients have been few and far between too.
Re: Non Paying Clients - [quote="TheAnonymousMan":2eedmtzv]I would suggest asking for a 25% - 50% deposit before you even start registering domain names or producing any mockups.[/quote:2eedmtzv] Oh yes... there were a lot of difficult lessons learned in that first year of business. That particular experience was the catalyst for re-examining the administrative process being used... we've required 50% upfront ever since. Another hard lesson led us to require all work orders and revisions in writing. You learn as you go along. Some people balk at the idea of paying anything upfront, so you do lose a bit of business, but I suppose these would be the same people who don't understand that what they're paying for doesn't quite work like picking a box off the shelf... retailers can simply re-sell a returned item. Service providers like us can never get that time back, and we can't resell bespoke design work. Luckily these clients are few and very far between. I've found that the deposit requirement has actually (for the most part) weeded this type of customer out from the outset.
Re: What are reasons to stay in touch with your customers? - No problem. One could also send them cards for congratulatory type things in their family's lives (new house, graduating child, new baby, retirement). This really shows them that you are paying attention to them as an individual. Of course you would actually have to be doing that in order to find out. I know that we always contact our prospects when we are having a special. Especially if it's a blockbuster of a deal. This tends to bring in several sales. Ok, I'm out of ideas for now.


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