Trying to figure out what may be in store for your business can be like looking into a crystal ball, especially if you’ve only just begun. One thing’s for sure; competition is fiercer than ever, with businesses continuously trying to push their way into the profit spotlight. Of course, you want to ensure that your business continually innovates and evolves. But more importantly, your business needs to be able to adapt to change and be able to grow at the same time.
Brexit and Your Business
If you do business in the European Union, the most important change on the immediate horizon is likely to be Brexit, but whether that impact will be positive or negative depends on the camp you’re from, according to initial speculators. For now, businesses are supposed to continue operating under EU business rules until new rules are introduced. This uncertainty is certainly slated to affect the majority of FSB businesses who export to the €11 trillion single markets, where 500 million potential customers await.
For other businesses, Brexit could be of great benefit. The proposed reduction of immigration will mean those who possess in-demand skills will be highly sought after by employers. The high demand for freelancers and contractors may only continue its meteoric rise for businesses wanting to stay flexible in this uncertain period. But the Brexit decision is still young, and how this will ultimately impact your business has yet to be seen. The key to presenting a solid business plan during this time of significant change is to ensure that your plan doesn’t resist these changes, but engages with them in such a way as to allow you to prepare for success.
Five Distinct Changes
A business’s life cycle will include five stages from research and development to decline, after which a business will endure either failure or a re-launch. The first stage of research and development primarily consists of cash outlays and can last from a few weeks to several years for a single product. Following this, the product is brought to market in some form. This introduction stage represents the second stage in the life cycle, which will also incur high costs and minimal revenue.
Growth is the third stage, where a product is sold across several segments of the market. It is here that it will obtain acceptance by customers and begin to become profitable. A peak in sales signals a business’s entrance into the fourth stage of maturity and saturation. The capacity of customers to consume the product is reached as substitutes or competitor products are introduced. It’s at this stage that profits begin to drop. This is due to a drop in product pricing in order to compete with substitute products.
The decline in sales and profits marks the final stage in the business lifecycle. Increased competition and better products are introduced to the market, which will either fuel the failure or the re-launch of the business.
Using the Stages to your Advantage
The best strategy for the success of your business in all climates is to use the money generated from mature products to put into items which will generate cash quickly. Usually referred to as ‘stars’, these products exist in areas where a business already holds a high market share. Your business plan will need to be able to show what resources, experiences and roles any business partners will bring to the table at this point, as well as what share of company ownership they have.
Managing Change Effectively
Changing circumstances will mean changing the purpose and direction of your business. In order to do this effectively, you will need to provide a compelling reason for doing so. Then, you must make the change easier to complete by dividing the task into manageable pieces before inviting people to join you in making it happen. Any successes should be rewarded as early in the process as possible to keep your plans on schedule.
Of course, no business can expect that everyone will commit to change easily or be enthusiastic about it. But placing your focus on those who are willing to help and recognising who are unwilling can do even more to help you plan accordingly for business changes.