Your business becomes a living concept the moment you start developing it from an abstract idea. As with all living things it has a business lifecycle, and it must be nurtured and catered for depending on which stage the business is in. Over the last few months, we’ve shared tactics and strategies that you can incorporate within each stage. If you’d like to start at the beginning of this series, click here.
At each stage of the development, it’s important to focus on the key aspects that your business requires to evolve at that particular moment. Your focus and priorities will change as your business grows; knowing when and how to make these changes is the key to the successful development of your business and long-term sustainable growth.
The Importance of the 5 stages of Growth
The stages of growth for any business can be broken down into 5 basic categories: Existence, Survival, Success, Take-off, and Resource Maturity. Each individual growth stage requires a different set of applied skills and resources. It’s important that you recognize the current stage of your business lifecycle so that you can better evaluate the resources required to nourish your business’ development and plan accordingly through each progressive stage.
7 Steps to Plan Your Business Lifecycle
1. Understand which stage you are currently in
Existing businesses often fail to accurately determine which stage of the lifecycle they are in. Referring to the previous articles in this series on the 5 stages of growth, you should be able to recognize which stage your business is at regardless of its age. Just because an established business has experienced growth does not necessarily mean that it has put in place an effective means to expand and cope with increased demand. Many businesses plateau at every stage because they believe they are operating at maximum capacity and don’t push through change or level up their game.
2. Learn the risk factors and key management activities in each stage
It’s important to acknowledge that you will be under prepared for different tasks at each stage of your businesses lifecycle. By planning management activities and resources in advance, you’ll reduce the effect of these risks to your business.
Identify the expertise needed to perform each project and the resources needed to deal comfortably with demand. Then start planning.
3. Plan to mitigate or overcome the risks associated with each stage
Risk management should be carried out ahead of new tasks or projects. Risks should be monitored and evaluated on an ongoing basis. Risk responses are varied and can include:
- Avoidance—eradicates a specific threat, usually by stamping out the cause.
- Mitigation—condensing the anticipated monetary value of a risk by reducing the probability of occurrence.
- Acceptance—accepting the ramification of the risk. Usually with the provision of a well-drafted contingency plan ready to launch should the risk become unavoidable.
For every risk you encounter, you should conscientiously choose one of these responses.
4. Ensure you have adequate human, financial and technical resources
A business can’t evolve to its full potential without the provision of accessible resources. All of which, ultimately require funding. The objective is to estimate demand with as much accuracy as possible. Often times, it’s better to have demand slightly ahead of resources. But, you won’t be able to sustain that rate for long.
5. Build the right team
It is important to build a team that can do the work efficiently and without too much direction. Hire strategic thinkers and capable leaders. But don’t hire too many cooks. It’s better to have one main chef and servers rather than have many chefs and no one serving the food.
6. Manage but don’t micromanage
Once you have the right team, let go. Delegate the work to them and be available when your leaders need direction and coaching.
Your time is far better used assessing the results and the productivity of the team and guiding them towards the goal. By not getting too involved, you can recognize potential risks before they are problems. Observe from afar and let those who are capable get the work done.
7. Evaluate results
Good planning is based on accurate data and previous experiences. Regularly review plans and forecasts and evaluate the results continuously. This data will offer a strong indication of your ability to plan and predict the outcome.
The planning for your business lifecycle should be an on-going process. Identifying new risks, overcoming them, and comparing the results against the plan are essential in refining your ability to prepare for the next stage of your business life cycle.
If you’re struggling at any stage, I can help identify areas of improvement and scalability. Give me a call today for an assessment.