Life Cycles of a Business
Altman Business Solutions
by Karen Fetter
As a business owner, you are always seeking a Pathway to Profit. No matter
your love for your profession, or how much passion you bring to your company, if
you are not on the road to profit, your dreams and goals soon become
unsustainable. We are not talking about greed, but about common sense concepts
to help you stay in business and continue to prosper. At Altman Business
Solutions, helping businesses find their pathways to profit is more than a
service, its a life goal for owner Virginia Altman.
In this article, Virginia helps us understand the life cycles of a business.
Like any other life cycle, a business life cycle begins with birth and ends with
death. The path you choose to establishing or increasing profit changes, based
on where you are in the life cycle of your business. The first challenge for
leaders who wish to grow their organizations is to understand what phase of the
organizational life cycle you are in.
Different experts argue on how many phases there are, but lets keep it simple:
- Startup (or Birth)
- Growth. This is sometimes divided into an early growth phase (fast
growth) followed by a maturity phase (slow growth or no growth). However,
maturity often leads to:
- Decline. When in decline, an organization will either undergo
Renewal or
- Death
In the start-up phase, Henry Ford said, Getting ready is the secret of
success.
During start-up, we see the entrepreneur thinking about the business, a
management group formed, a business plan written. For entrepreneurs needing
money to kick start the business, the company goes into the growth phase once
the investor writes the check. For those who don't need outside funds, the
start-up ends when you declare yourself open for business.
Of course, everything you do in the start-up phase is geared towards getting
customers, and making sure that you have services and/ or products, depending on
the business, that have value for the customer, and are delivered in a way that
entices them to buy more or to refer you to others who will also buy.
If being prepared is the secret to success, how do you prepare?
Besides the time spent acquiring the skills and knowledge to necessary to run
your business, one critical function is putting together a business plan. When
you are in start-up and don't have a track record to go by, it can be a little
difficult to do this, but it is essential.
Without a detailed plan, you have no touchstone, no reference point to know if
you are on track or not. You may have some customers, but you could quickly lose
them if you are not organized to deliver the goods and services you promised,
grow as the demand grows, and remain focused on a clear set of goals.
If you've done your homework right, your business moves into the growth phase.
In the growth phase, one expects to see revenues climb, new services and
products developed, more employees hired, and so on. The management textbooks
love to assume that sales grow each year. The reality is much different since a
company can have both good and bad years depending on market conditions. For
example, the challenge right now is creating growth in a shaky economy.
At Altman Business Solutions, Virginia offers a product called Annual Health
Check-up for your Business. This product takes in your financials and analyzes
them and pinpoints opportunities for improving your profit margin. It also
provides a Fair Market Value for your business, so you know what value the
business has in the open market. Its a good way of assessing whether the work
you are putting in is paying off and keeping you on track to success.
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For any business, the most important thing to do is to really understand your
finances. In today's tough economy, it is tempting to just say "tighten your
belt"; the reality is that, when you are operating a business, it's not as
simple as simple as just tugging around the middle. Every element of your
finances should be clearly laid out and understood; and they should be compared
to the finances of others in your industry to see how your spending and revenue
patterns compare to theirs.
An Annual Health Check-up for your Business provides an excellent approach to
seeing where the real opportunities for financial security lay.
Actually, large corporations do this sort of thing on a monthly basis. Small,
medium, and start up companies should at least consider a yearly review. And it
doesn't matter what phase of the business life cycle you are in, but is
certainly valuable in the growth phase.
As mentioned earlier, growth breaks down into two phases: Fast Growth and
Maturity. At first, even a handful of new customers can double your business. At
some point, sales start to level off and the maturity phase is achieved.
In organizations that have been around for a few years, a very interesting
thing happens - dry rot sets in. Generally speaking, you know you are moving into
dry rot when you begin experiencing what Virginia calls "Corporate Insanity,"
which can be defined as doing the same thing the same way and expecting
different results! For an example, you don't have to look much further than the
recent behavior of the big three automakers in Detroit.
Without considering the changes in the market, the big three want the outside
world to behave the way they want it to - buying their cars rather than those of
the competition. They want this result without necessarily creating the product
or developing a corporate culture that can compete in the global marketplace. At
this point, their options are renewal or death. There is no option for them to
stay the course.
But it's not all disaster stories. Anyone who has heard of the iPod or iPhone
knows that Apple successfully reinvented itself from a failing computer
manufacturer into one of the most significant success stories of the 21st
century. It wasn't luck but smart planning and a keen understanding of markets
allowed this turnaround.
As mentioned at the beginning, each phase in the life cycle of your business
requires you to recognize the phase you are in and develop an appropriate set of
responses that can keep your business on its pathway to profit.
You can learn more about keeping your business on a Pathway to Profit by
calling Virginia Altman at Altman Business Solutions, Inc. Her phone number is
724-547-0940, or email her at
info@AltmanBusinessSolutions.com. Visit the website at
www.AltmanBusinessSolutions.com.
You can learn more about keeping your
business on a Pathway to Profit
by calling Virginia Altman at
Altman Business Solutions, Inc.
Altman Business
Solutions, Inc.
7092 Route 819
Mt. Pleasant, PA 15666
724-547-0940
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