As the song says, there is a time to plant and a time to reap, a time to build up and a time to tear down, a time to gain and a time to lose, a time to live and a time to die. To everything, there is a season. Due to the nature of the business, funeral service professionals understand lifecycles. However, even those who understand the cyclical nature of human life may not fully understand the lifecycle of their business. Taking time to consider how your business will progress through different stages can help you succeed and better plan for the future.
Labeling your lifecycle
A business lifecycle generally follows the same path as a human life – Development, Startup, Growth, Expansion, and Maturity. However, as in life, the number of stages and their defining qualities vary depending on whom you ask. Sometimes Development is skipped over and Startup is considered the beginning of the cycle, while other times Decline is considered the end of the line instead of Maturity. Categorization preferences aside, there is a rhythm, a pattern, a beginning, and an end to every business.
In the beginning
Good things take time to develop, and good businesses are no different. Your initial idea is a seed. Researching, vetting, and putting your idea in motion is the planting of that seed. The beginning of a business lifecycle can feel especially challenging. During this stage, it is important to be thoughtful, adaptable, and open to criticism. It is also important to be realistic; you’ll be spending more than you’re making at first, at least until that seed grows into something that is stable, reliable, and profitable. In the beginning, you will:
- Audit and hone your idea
- Build your business framework
- Develop and launch your business plan
- Find your voice and establish your market
Growing up and out
Like a person or plant, growth is a big part of the business lifecycle. Your business will grow structurally, philosophically, and, hopefully, financially over the years. It will reach up and out in ways you may or may not anticipate, so be prepared to change direction or even scale back when necessary. Any obstacles you encounter along the way are part of the growth process, which will eventually lead you to a more secure, more mature stage. During the growth portion of your business cycle, you will:
- See a jump in sales and increased cash flow
- Expand your products, services, workforce, etc.
- Realize profitability
- Enjoy name recognition and a solid client base
- Reach a point of sustainability
Reaching maturity
After an advancement period of making your mark in the funeral services business, you will hit a plateau. Competitors will catch up to any exclusivity of products and services that once set you apart, and constancy will overtake growth as your normal state of existence. In short, you will go from a young, spry, dynamic entity to one that has found contentment and is a little more set in its ways. Sales and profit margins will likely begin to decrease over time. This stage is part of a normal progression, and it has its benefits. After years of hard work to make it work, you are finally comfortable. As your business matures, you will:
- Face increased competition
- Consider making changes to remain relevant
- Think about your exit strategy
Standing at a crossroads
Some business lifecycles list Decline as the final stage, but that is more of a decision than a decree. Just as with the maturity of a human life, you can choose what maturity looks like for you. Are you going to stay up on the latest and greatest products and services, using them to stay fresh and reinvent yourself? Or, are you going to quietly enjoy your golden business years until it’s time to ride off into the sunset? There is no right or wrong answer. As you stand at your business crossroads, your possible paths include:
- Returning to an expansion phase to prolong your business lifecycle
- Exploring new products and services to reinvent your business
- Handing over the reigns while still maintaining ownership
- Selling your business and moving on to a new stage of your personal life
There was a time when the funeral services business was more predictable and somewhat defied the cyclical nature of business. However, the funeral services business is now as subject to innovation, changing standards, diverse client demands, and other market forces as any other business. You are part of this ever-changing lifecycle and need to prepare yourself for the ride through a deeper understanding of things to come.
Contact the JCG team today to learn how Johnson Consulting Group can help you plan your future.