It’s been a tough couple of years and it’s important as small business entrepreneurs not to lessen your own self-care!
Merry Christmas, have a relaxing break and recharge your batteries!
We are taking some time off and will be back again with a new article on the 18th of January 2022, to continue our series on Managing a Mature Business..
See you then!
This is the second in our series of articles on managing a mature business.
If you missed the first article, about managing the cash flow of a mature business, you can click on this link.
We have also completed our series of articles on Starting A Small Business and on Growing Your Business, and the links provided will take you to the first articles of those series if you missed them.
In this week’s article, we are (hopefully) going to recognise that your business has reached the mature stage in its life cycle, and look to renew the cycle before it drips into the next stage, which is the stage of decline!
But first, let’s refresh our memories to talk about the four stages of the business life cycle: –
This is the first in our series of blog posts about Managing A Mature Business.
In case you missed it, we completed a set of 7 posts about Starting A Small Business, from making sure you know your Purpose to how to start up, to preparing a feasibility check, planning and hiring your first employee, and you can catch up by going to teikoh.com. We have also just completed another 7 part series on Growing Your Business from learning about Key Performance Indicators for your growing business to marketing, working with employees and making sure you have the systems to scale. You can also look for it on our website at teikoh.com.
In a business, at any stage of its life, cash flow is an extremely important part of that business’ lifeline and will always need to be managed.
However, in a mature business, the cash flow pattern is more challenging. The business is no longer growing, in some cases it is stagnant and while you may have reduced investment needs, the cash that is generated through a mature and stagnant level of sales may not be replenishing the “catching up” of cash outflows that you were experiencing before.
There are four stages of a business cycle, being startup, growth, maturity, and potentially decline.
In the startup stage, sales are low in volume but grow quickly. In the growth stage, sales are beyond the break-even point and both sales and profits are increasing. In the mature stage, the rate of growth slows down and cash flows become relatively stagnant.
If you are not managing your cash in maturity, in order to invest in innovation and new products and services to kick off the next growth phase, you may enter the decline phase where all sales, profit and cash flow decline until you exit the business.
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