Once you understand the five phases a business goes through, create an action plan for each phase. Keep in mind though that a new business will need a different approach than an established business.
Here are some examples and ideas for action plans for the first three business phases.
Launch Action Plan
The launch phase can be launching a new business or department, or a new product or service. It is a time to secure initial revenue and product to fit the market:
1. Adapt products to fit the market:
a. Verify the value proposition. Products and services must solve specific pain points for the target audience.
b. Start out with a minimum viable product. Start out with a simple version of your product or service to gauge consumer interest and to gather data.
c. Refine your offering based on real world feedback. Refine your offerings based on how consumers actually use the product or service rather than on how you expect them to use it.
2. Managing cash and economic viability:
a. Keep fixed overhead costs minimal. Keep overhead costs as low as possible and outsource tasks, such as accounting, to avoid liabilities (for example, an office lease) over the long term.
b. Monitor your cash. Make sure you know how long your business can survive financially before needing funding.
c. Concentrate on financial inflows. Focus on sales events and actions that generate instant cash flow over the long term.
3. Sales and marketing leverage:
a. Foster trust. Ask clients to write reviews and you can create case studies to foster trust and credibility for new clients.
b. Customise non-scalable marketing. When you launch, it is wise to use marketing that does not scale. Instead use founder-led selling, direct networking and cold outreach to win over your first consumers.
Growth Action Plan
The growth phase is the most exciting phase but it is also dangerous. It is when you need to scale the business without changing the core structure and systems it is built on. The following is an example of a growth action plan:
1. Workforce planning and hiring:
a. Create mid-level management. At this stage you can no longer do everything yourself. Promote or hire people to manage the daily operations of the business.
b. Hire with the future in mind. Hire people with experience in businesses the size you expect to be in three to five years, not just in businesses of your current size.
c. Keep records of everything. Make your standard operating procedures consistent to help onboard new people efficiently.
2. Marketing expansion:
a. Scale up what works. Scale up the marketing that works.
b. Preserve customer retention. Make sure you keep your old customers while chasing new ones. It costs less to retain current customers than to acquire new ones.
Shake-out Action Plan
The shake out phase of a business lifecycle is where there is the greatest competition with a loss of profit margins because of a saturated market. This can mean that sales growth slows and there is the start of price wars between competitors.
To survive this phase:
1. Cut operating costs:
a. Assess business expenses. Reduce overhead expenses that are not essential to the business and reduce production costs.
b. Defend pricing power. Do not let competitors engage you in pricing wars that will result in a race to the bottom. Innovate.
c. Boost effectiveness. Get rid of excess inventory, consolidate workflows and streamline routine tasks.
2. Maximise customer lifetime value:
a. Target loyal customers. Instead of targeting new customer acquisition, concentrate on providing more value to loyal customers.
b. Unique selling proposition. Highlight your unique selling proposition These are the features that set your products and services apart from the competitors trying to copy you.
c. Evaluate your pricing strategy. Consider bundling services and products and fine tune your pricing strategy.
Final thoughts
These are only brief examples of action plans to implement to optimise your business success. This can be complex and you may need someone with the right experience to help you.
Ben can help you create an action plan for each business phase and implement the steps needed to progress your business.
To discover how Ben s services can assist you, call to set up a meeting to discuss your business support and accountancy needs.