There are thousands of articles on websites like Entrepreneur.com or Inc.com detailing how to grow your business. And I’m sure if you implemented just one thing from every article you ever read, your business would be in a better position. This would include running an annual planning session and establishing an advisory board, you know, the staples of any successful business.
One important concept you need to understand to grow your business, is that of the Business Life Cycle.
IMPORTANT: if you are struggling to grow your business, maybe sales have plateaued, your team is unmotivated or the business isn’t where you originally envisioned it to be, keep reading because you are about to find out what strategic decisions you need to make to drive growth.
The Business Lifecycle is something I leant many years ago from a business called Shirlaws Coaching, so I won’t take the credit as being its creator, however it is a powerful tool for strategic planning. Looking at the chart below, we are all sitting somewhere on this trend. Some may be nearer to the left, in startup phase, others in the middle in the high growth stage, but few will break the second, and much larger, brick wall. Let’s take a look at what this chart means for you, and where you need to focus your attention.
Dependent on where you currently sit, your strategy should be focussed on continuously moving and breaking through two important milestones that cripple many businesses.
Remember when you first started your business? Or maybe you are just starting now. This time is very exciting, converting sales, sending out your first invoices and establishing some cashflow. This stage is fun and tough, plus you have to invest a lot of time and energy to really drive it. This is when you hit the first brick wall and you need to invest time and energy to grow your business and push through this milestone.
Moving into the growth stage, you’ve put in the hard yards, your business growth trend accelerates and with that comes sales and cashflow. What happens here is you start rewarding yourself. Maybe you buy a house, a new car, take a few holidays and why not? You’ve worked hard so you deserve it right? This is called Payback Time because you feel like the business now owes you. “It’s my business, I built it, so I’ll take take whatever cash I want and enjoy it.”
Suddenly you’re now working 7 days a week, there is a blurred line between work and home, your missing out on family time and the business is not growing as quickly as it was not that long ago. How did this happened? WTF? Now you get frustrated at yourself, at the business, at everything. Stress starts to settle in, you’ll become anxious in answering the phone and meeting with clients, and decisions will be made in a panic (which is never a good thing, especially if they are strategic decisions).
Welcome to the second brick wall 🙂
From here, things usually go 1 of 3 ways:
- You get through the wall and experience Rapid Growth (trending upwards)
- Your growth Plateau’s (a flatline trend)
- The businesses growth Decline’s (downward trend)
To break through this second wall and continue to grow your business, you are playing a different game to when you first started. You need to determine what your role is and just as importantly, what it isn’t. And also assess all other roles in the business. How many hats are you really wearing and should they be delegated either internally or externally. A great question to ask at this stage is, “Am I the best person to act as CEO?” Because maybe you are, and maybe you aren’t. This isn’t about your ego, it’s about what’s the best strategic decision to drive the growth of the business.
Some more questions are:
- is there an effective sales process in place?
- is there a strategic plan in place to drive business growth?
- is there a succession plan in place to pass on the baton?
- where do we sit in the marketplace?
A high emphasis on strategic decision making is now a priority, because unless you had planned and implemented strategies for rapid growth, you may shrink as quickly as you grew.
So where do you think your business is at? Also, where do you think your head is at? Because how you feel and where your business sit’s can be two different places. So you may have to put in some work to grow personally. Never discount personal growth.
I’d love to hear where your business sits and whether you’ve had any “lightbulb” moments that have brought some understanding to the trend of your business. Comment below!