Where is your business?
Two reasons we bring this up: 1) It’s important for your customers and prospects to be able to find your business; and, 2) It’s important for you to know where your business is in the cycle of life for a business such as yours. Make that three reasons: 3) It’s critical that you know how your business is doing from the consumer’s perspective, which ties in closely with customer service. Are you doing the right things to take care of customers and bring them back frequently?
#1 refers to your location, whether it’s the physical plant or your place in cyberspace. You need to make it easy for people to find you, either through optimizing your search engine position and social media or providing clarity as to your physical location. If your business is at the corner of a major intersection in town, just off the highway, or conveniently located next to a city park, use your advertising to tell people that’s where you are.
The focus of this blog, though, is on #2 – where your business is in its life cycle.
At left is one of hundreds of diagrams that try to explain the cycles a business typically goes through during its existence.
This example may seem foreign if you’re unfamiliar with Smith-Corona, which was one of the top brand names for typewriters in the days before computers. When you think about a company that had a dominant role in the typewriter business and look at the life cycle diagram in that context, it is rather obvious why Smith-Corona disappeared from sight. The company had grown and expanded to a position of maturity in the typewriter marketplace, but failed to make the transition when the new technology of computers entered the picture. Transitions can be brutal, especially when most people and a majority of companies tend to resist change.
Take the time to think about your business. This is always a good exercise. It forces you to work on your business by thinking about where you are instead of remaining immersed in the day-to-day ennui that can stifle the growth or expansion cycle. Do you consider your business to be on an upswing, or have things stabilized and stayed fairly steady? Do you enjoy a high percentage of repeat business from the same customers or do you have a steady influx of new customers? Are you unsure where you are because you’ve only been in business a year or two?
Have you grown as much as you can and now sales and production seem to have stagnated? The question you may ask if you’ve reached this cycle is “Now what do we do?” This is an excellent position for bringing in an outside consultant to examine and explore options. They might help you discover that a simple change in your existing product line or offering a similar but slightly different service can re-energize sales and bump up production for an additional boost. They might also find that what you’ve been doing for x number of years is out of style and an entirely new direction is needed.
Take those recommendations, whatever they might be, with a modicum of caution. Weigh the costs of re-tooling and re-branding your business to make sure the change makes sense. Change for the sake of change is rarely worth it, since change is constant anyway.
Here’s a big question: What are your plans for getting out of the business? Do you have an exit strategy in place? Are you like a great many dreamers who insist that their business is their retirement plan and when they’re ready to retire, they’ll sell the business and live off the profits? Think about that for a minute … or longer and do something about it before it’s too late.
We counselled a client with that mindset and talked frankly about the potential for that strategy to do what they anticipated it would to let them retire. A buyer would have little interest in their facility unless the new owner was looking to first enter the marketplace and had yet to establish a base of operations. If the buyer did have a facility, the interest level would be less. The same would hold true for the equipment, machines, and tools which become antiquated the longer they have been in use. Even employees, unless they’re willing to move, may be written out of a purchase agreement.
What the potential buyer has the most interest in is the customer base!
Lots to think about as you continue through the process of evaluating your company’s position in its life cycle. When you need an independent party to help you through the process, contact Brand Irons at 920.366.6334.