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Thread: Expand the Life of Your Business

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    Expand the Life of Your Business

    Today I'm going to talk about the life cycle of a business and how to get the most out of each cycle while also extended the lifespan of your business.
    The four different stages of a business life cycle are:

    • Infancy
    • Adolescence
    • Growing Pains
    • Maturity

    We’ll talk a little about what each of these cycle’s means and how they can each help expand your business’ lifespan.

    Infancy
    This is generally consider the technician’s phase, which is the owner. At this point, the relationship between the business and the owner is that of a parent and new baby. There is an impenetrable bond that is necessary to determine the path your business will follow.
    The key is to know your business must grow in order to flourish. You cannot stage in this stage forever.

    Adolescence
    In this stage you need to start bringing your support staff together to delegate to and allow growth to happen. The first line of defense is your technical person as they need to bring a certain level of technical experience. This cycle really belongs to the manager though. The plan stage needs to start and a relationship should be built with the entrepreneur to plan for the future.

    Growing Pains
    There’s a point in every business when business explodes and becomes chaotic. This is referred to as growing pains. It’s a good problem to have, but a problem nonetheless. You are often faced with a number of choices:
    • Avoid growth and stay small
    • Go broke
    • Push forward into the next cycle

    Maturity
    The last cycle is maturity, though this doesn’t mean the end of your business. Your passion for growth must continue in order for your business to succeed. You need to keep an entrepreneurial perspective in order to push your business forward.
    You see how all three of these cycles are connected and depend on a strong foundation for each one of them for your business to be and continue to be successful. All three of your key roles must also work together to work through these cycles.
    If you’re having trouble putting together your business life cycles and figuring out which of the key roles you fit into, try our FREE test drive and work with one of our amazing coaches.
    Last edited by Cristina; 08-Aug-12 at 09:38 PM. Reason: reduced link count

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    Diamond Member Blurock's Avatar
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    Another spamming attempt? There is a separate advertising post for members.
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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Blurock View Post
    Another spamming attempt?
    Probably. But the makings of some meaningful content too.

    I clipped the link count down to something more acceptable, and hopefully Cristina will heed my cautionary note when posting in future.
    The trouble with opportunity is it normally comes dressed up as work.

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    Gold Member Mark Atkinson's Avatar
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    Quote Originally Posted by Dave A View Post
    I clipped the link count down to something more acceptable, and hopefully Cristina will heed my cautionary note when posting in future.
    Zero?
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    Site Caretaker Dave A's Avatar
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    Tough crowd!

    The rule is "relevant and reasonable in number" when it comes to links in content

    Would you care to comment on the content?

    For example, I gently disagree with this:

    Quote Originally Posted by Cristina View Post
    Infancy
    This is generally consider the technician’s phase, which is the owner. At this point, the relationship between the business and the owner is that of a parent and new baby. There is an impenetrable bond that is necessary to determine the path your business will follow.
    The key is to know your business must grow in order to flourish. You cannot stage in this stage forever.
    Actually you can stay in this stage and do quite well. I did for 5 years - quite deliberately. And apart from the first 6 months, it was easily the most stress free period of my business life.

    The problem of course is if you aren't working, generally you're not making money. And the exit strategy options are pretty limited.

    But otherwise, once you've got some traction it's really pretty sweet .
    The trouble with opportunity is it normally comes dressed up as work.

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    Diamond Member Blurock's Avatar
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    Quote Originally Posted by Cristina View Post
    The four different stages of a business life cycle are:

    • Infancy
    • Adolescence
    • Growing Pains
    • Maturity
    This sounds very much like raising children, but I guess for some business owners the business is their loving child.

    I have the business cycles as:
    • Seed stage
    • Early Success
    • Growth or Sustained Success
    • Maturity
    • Decline
    • Exit or Rejuvenation

    Each stage will have its own finance and investment requirements as well as revenue and profit trends and unique strategic focus.
    E.g. The first two stages require working capital to fund the high growth. Losses may still occur, but profits increase.
    Growing into the mature stage will see more stable revenue trends with stronger profit trends. The need for funding should be reduced as the business should now be generating free cash flows.

    Once the business is in decline, revenues and profit will also decline and additional capital will be required for rejuvenation. If this is not possible, an appropriate exit strategy has to be followed to minimise losses.

    I agree that it is important to understand where you are in the business life cycle in order to adapt your business strategy accordingly. Linked to this may also be the industry life cycle. Are you in a mature or a declining industry? Is it time to look at emerging technology to rejuvenate your business or to start a new business?
    Excellence is not a skill; its an attitude...

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    Diamond Member Blurock's Avatar
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    How many business owners have an exit strategy?
    This is usually the last thing we think of when starting a business.

    What is your ultimate aim with the business? Do you want to work until you drop dead, or do you want to leave the business to your children? What if they do not want the business? What if they would rather do something else?

    Should you grow your business to eventually list on the stock exchange? If that goal is not attainable, can you sell your business to a prospective buyer? If you have other shareholders, would they buy your shares? What would happen if one of the shareholders should die? Do you have a buy and sell agreement?

    A good strategy is to always prepare your business for sale. If is attractive for investors, it is likely to be attractive for customers and of course for providers of finance.
    Excellence is not a skill; its an attitude...

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    I think the reason most business owners don't have an exit strategy is because they got into "business ownership" for the "wrong" reason: They had to earn to survive, lack of employment, etc. The "correct" way to get into business ownership would be to have all the correct plans first and that a choice would have to be made. Many business owners/operators/sole proprietors didn't really have a choice. I myself fall into the first category.

    That being said, any business that has become established and over 2 years old, should look into things like exit strategies and preparing the business for sale. There used to be a good seminar done by Mark Corke called "Prepare your business for sale" (not sure if he still does them, but can find out if anyone is interested) which wasn't about actually trying to sell your business, but doing exactly what Blurock suggests above.

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