Spokane Regional Networking, Social Media, Professional and Business Development
This probably should have been part one of the series since knowing your end objective is part of the foundation of good strategy. Do you intend to provide the best pizza in the region with a family atmosphere? Are you trying to be the market leader in high tech widgets? How about providing the highest quality financial and strategy consulting to small businesses with a focus on those trying to grow? Yes, that last one is a shameless plug. Don’t be afraid to be specific in what you want to do, in many ways it is actually imperative. You can’t just say that you want to have the biggest company in the world. Is that by sales, net income, employees, or customers served? This is also where you need to realize that you can’t be everything to everyone; there are markets, industries, and people which your organization will not succeed in catering to.
While the vision statement for an organization provides an end destination, the mission statement focuses more on what the organization is doing now to get there. Are you a pizzeria in the process of growth regionally through franchising? Are you doing research and development of a new high tech widget which will turn the market upside down and permit you entry? How about offering consulting services in budgeting, forecasting, project valuation, business planning and strategy to small businesses in Spokane? Yes, that was another shameless plug (and probably not the last). Again, be specific. This statement can also communicate values of the organization with an emphasis on building trust, and a certain reputation or image. These two statements provide some important guidelines for the further development of your strategy. You now have an end game, and specific rules (beyond regulatory) to abide by.
Implications of the Business Life Cycle
Just to be clear, this is an entirely different, but not completely unrelated topic from vision and mission statements. The first stage of the business life cycle is arguably not even a stage. This is the phase where an individual or group contemplates and plans the start of a business, but have not yet committed to a venture.
The second stage is the growth stage. From startup onward, successful businesses grow, frequently in a frantic and rapid manner. Once successful business hit that takeoff point resources are typically focused on meeting demand. It is not uncommon for businesses in this stage to experience ‘slop’ in cost structures. With an emphasis on increasing capacity cost control tends to take a back seat.
The third stage is commonly called the ‘crucible’ and is where many businesses lose steam. Cash flows and financing are maxed out with demand still to satisfy. As a business grows, it rarely does so exactly according to plan. You may have started out working with product X, which did pretty well and got you going. You introduced product Y and things really took off. Product X was the foundation of your business, but Product Y significantly outpaces it in profitability. As much as you may be attached to product X, it may be time to scrap it and put the money into Product Y where the future is. As entrepreneurs are so personally invested in their businesses this can be a tough decision and is why some chose to go down with the ship.
The final stage is maturity. You have moved past those tough bottlenecks and decisions and you have made yourself a force in the market. You have made it through the learning curve and now hold some power in the market. This doesn’t mean you can just rest on your laurels; however. Standing still means that someone else is probably catching up. Additionally, you may be reaching the capacity of the market with growth potential greatly diminished. This is the time to do two things; the first is to revisit the ‘slop’ in operating costs and trim it down to increase profitability, and the second is to start the whole process over to stay one step ahead of the competition. At least the second time around the learning curve shouldn’t be quite as steep.
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