A business is not just a separate entity in law, but it mimics nature in that it has a birth, growth, decline and death. Unlike our physical body, we can choose to intervene with a business to extend the life of business many times over.
At the start of this year, I shared a video about the different life cycles of a business.
Here, I share this in a blog format so you can refer to it with case studies.
I also ask three questions which enable you to uplift your business - only if you want it!
There are commonly accepted six stages of the business life cycle.
I'll share the stages and positive case studies of businesses who are growing through each stage.
Otherwise referred to as the planning stage, mostly done in secret. Some start with a 'gut feel' while others do significant market research. The focus here is about creating a business case to justify the direction you are about to embark. Many start with a sense of purpose, but you had to market test the idea to see test the viability. Now with the growth of plant-based and alternate protein, there are more extensive ways to start-up.
Proof of Concept
You have launched and changed your products (or service) a few times to the market needs, and the business is starting to take off. Congratulations!
Many founders feel they don't have the resources to scale-up their business at this stage. OR on the flip side want to grow before they have the infrastructure in place. They can become overwhelmed by the process, and this is where the stress can cause inaction.
Positive Case Study: Shiok Meats – A Singapore cell-based start-up focussing on prawns. They have just past the proof of concept, and they are now looking at the next stage of commercialisation. Their growth rate is phenomenal because they had advisors and support to enable their growth.
This stage is where you see the rewards for your efforts in business growth and impact! Your business is starting to take off. Much of the commercial world didn't realise your market potential. Now, your products are being seen by others in your category. You have a short window to recognise as the market leader.
The growth phase can last for many years, with large capital investments and support.
Positive Case Study – Beyond Meat in the plant-based meat category. The global market leader in plant-based meats. Established in 2009, and while they are still not profitable, the growth rate has been phenomenal.
Other businesses are now entering the market to capture your market share. The growth rate starts to decline.
An example: In the US, the annual growth for plant-based consumer packaged goods is about ~11% according to Good Food Institute. If a former market leader is growing at less than 11%, then this is an example of the shake-out phase. In some categories, the growth is much higher. For instance, in the US, plant-based yogurt grew ~30% last year.
The market for your products is starting to turn. Now, is the time to try different strategies like re-invent your brand, acquire another brand, create new products, trim the range, entering new markets, to name a few.
An example: with Covid-19, many hospitality businesses shifted to online and delivery. Those who moved first and listened to the customer were able to grow a new revenue channel until the lock down ended. While the deliveries are not regular, it's opened up new possibilities.
The revenue significantly drops and drastic action is needed. It is time to either apply the strategy changes above or even sell the company. This doesn't mean the end, with the right support the life cycle can be extended. There are many businesses going through continual renewal.
Where is You Business in the Cycle?
So, where is your business in the business life cycle?
Are you content with the growth & impact you are creating?
If you want to do more, here are three questions to reflect on until the next time we meet:
- What will you start doing to uplift your business?
- What will you keep doing to uplift your business?
- What will you stop doing to uplift your business?