What’s Your Business Life-cycle?

Everything in this world has a life-cycle, whether it is animate or inanimate.

There’s the human, animal or insect life-cycle. Man-made things like machines have a life-cycle and so do organizations like businesses.

So what’s the life-cycle of your business?

Businesses that sell products have a different life-cycle to those that sell services. The life-cycle of a business that sells products is governed largely by the demand and visual appeal of its products, whereas the life-cycle of a business that sells services is governed by the demand for its services and the well-being of the service provider.

Life-cycle variables associated with a business that sells products include the type of product, quality of the product and the nature and size of its market.

Life-cycle variables associated with a business that provides services includes depth of knowledge, its specialisation or uniqueness, the health of the service provider or business owner and whether there are plans for succession.

When we talk about the health of the service provider or business owner we are referring to the well-being of the person and the level of physical or mental exertion he or she applies to providing services. For example: a trade person like a builder or an electrician applies more physical exertion than does, say, a professional person because a trades person is required to be more active in his or her occupation. A professional person, on the other hand, applies more mental exertion in what is a relatively sedentary occupation.

This means that in assisting a person in a trade business, an experienced business advisor should take into account the relatively shorter life-cycle of the business and assist the client in such a way so as to maximise results and benefits over his or her business life-cycle. Likewise, for a client in a non-trade or professional services business, the advisor should take into account a longer life-cycle and the results and benefits that could be achieved in that type of business. In both types of business the advisor should also take into account the health, risks and financial constraints of the business owner. The advisor’s focus and service should be tailored to meet specific client needs.

Your advisor should determine, plan and advise you around what stage you’re at in the life-cycle of your business and incorporate this into your medium term business and succession plan.

Has your business advisor taken into consideration the life-cycle of your business? If not, you should ask why not, because to ignore life-cycle planning in your business is to ignore a key component in the equation for business success and personal achievement.

Next Step
The life-cycle of your business is fundamental to the way you enter, operate and exit your business. If you haven’t been advised or undertaken any life-cycle planning for your business, you need to do some serious thinking then take action. A word of advice: don’t leave it too late as everyday your business will continue to progress along the life-cycle path – perhaps faster than you think.

If you plan, you’re more likely to come out better off at the end of the life-cycle than if you left it to chance. If you need experienced advice on life-cycle planning in your business, we will be happy to assist.

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