You may recall that in last month’s blog, we talked about the maturity phase of the business lifecycle. While that was the make-it or break-it phase, the next phase is even more important to understand—the renewal or decline phase. Preparing for what comes next is important. As Forbes reminds us, understanding each stage of the business life cycle is critical for making the right, strategic, business decisions. We are here to walk you through understanding this last life-cycle phase and making the best decisions for your business.
The Renewal/Decline Phase
It’s probably not surprising that the business lifecycle can be tricky for some business owners to fully understand, especially new and first-time owners. Each of the four phases—startup, growth, maturity, and renewal/decline—have unique trademarks, considerations, and decisions to be made to keep the business on track to succeed.
In the maturity phase, business owners enjoy a level of comfortability where profits are stable and the client base is solid. But, a prudent business owner should ask, what comes next? Moving into the final phase of the lifecycle requires business owners to decide whether to renew the business or let it begin to decline. Both are valid and acceptable options. Only you, as a business owner, can decide if you want to keep the business going or move on to new ventures.
Understanding if and when the time is right to consider whether your business is in a period of renewal or decline can be challenging. Hypothetically speaking, if your sales are increasing 2% each year after a period of little growth, you might think that your business is experiencing a renewal as a result of decisions made that brought in these additional sales. However, it is established that sales are not the only indicator of renewal. For example, though sales have increased, you could be losing small customers and not gaining larger ones, all while turning small profits. In this hypothetical, the business may seem like it is in a renewal phase, but in reality, it is not.
We are going to explore how to navigate the business lifecycle from a renewal perspective. But keep in mind, not all businesses are ready to commit to that renewal phase. There just might be too much uncertainty about if and how the company will continue on. If that is the case, you should think about ways that you can delay the decline phase from setting in while you strategize about the future of your business. The most recommended ways to delay the decline is to be sure that you have a well-supported marketing budget and to explore new ways to spread the word about your business.
Navigating Your Business’ Renewal
The renewal phase allows you to take a step back and strategize how you want your business to continue. Here are some action steps you can take during this phase:
- Seek out growth opportunities that tap into creativity and innovation—don’t shy away from new ideas!
- Investigate emerging markets and trends, even if they don’t seem totally aligned with your industry.
- Make a plan! Just like when you drafted a business plan when you started your business, you should make a new business plan. Consider this the evolution of your business!
- Seek out funding for growth based on your new business plan.
Let Us Help!
Breathing new life into your business may require additional funding for infrastructure, equipment, or other resources. Depending on your business and industry, you may be eligible for any number of small business loans that can help you take your business to the next level. Not only do we have online resources to help decide your next funding steps, but we also have a team of dedicated professionals who love helping small businesses flourish. We’d love to talk to you about renewing your business today!