Five Strategies for Ensuring Business Success

This is part one of a five-part series on "Five Essential Strategies for Ensuring Business Success." Strategy #1 is "Understand the Cyclical Nature of Business." Understanding the Cyclical Nature of Business is a critical element for achieving and maintaining business success. Business owners and Executive Managers who understand the cyclical nature of business, and their industry in particular, rely heavily on their ability to consistently and effectively plan. They know that the economy and every business has highs and lows. And, Highly Successful Business Owners and Executive Managers plan in anticipation of these peaks and valleys. They know that their business must be prepared to not only overcome these peaks and valleys but to thrive when rare or unique opportunities to grow and expand present themselves.

Just as there are economic cycles such as a "bull" and "bear" market, there are 3 general cycles of business development: Formation, Maintenance, and Growth. More importantly, each of these business development cycles encompasses inherent challenges. Thus, business owners and executive managers who are aware of these inherent challenges are more equipped to plan and implement effective strategies for maintaining or increasing the revenue, profitability and efficiency of their business during each of these business cycles.

In the Formation Stage, a business transitions itself from an idea or concept to a tangible entity. Key Individuals who possess a unique set of skills or abilities commit themselves to helping the business fulfill its shared vision. The business, then, begins to market its products and services. An inherent challenge during the Formation Stage or planning stage is underestimating the amount of capital needed to sustain the business until sufficient revenue can be generated.

In the Maintenance Stage, the major priority of business owners and executive managers is to establish a solid foundation for the business internally and externally. This includes generating enough revenue to remain in business beyond the first three to four years, "breaking even" and then generating a profit. An inherent challenge in the Maintenance Stage is the inability of business owners and executive managers to develop and implement cost-effective and efficient marketing strategies that will generate enough revenue to sustain the business and support its growth and expansion.

In the 3rd stage, the Growth stage, as a result of coincidence or effective planning on the part of management, the Business seizes new opportunities for increased revenue among their current customer base or in newly identified markets. However, one of the inherent challenges in the Growth Stage is that businesses often attempt to grow too fast, or too soon. That is, before or without considering the impact of expansion on the workload and morale of their current employees; and, before they have developed a solid written strategic growth plan that encompasses "What additional employees are needed to support the company's long-term growth, expansion and stability?" and "What financial management strategies will maximize the company's increased revenues and profits?"

Another inherent challenge in the Growth Stage is the tendency of business owners and executive managers to fail to proactively address any areas of "inefficiency" within their business. Because money or revenue flows so easily during this business cycle, business owners and executive managers frequently underestimate the long-term negative impact of failing to closely monitor the efficiency of employees and previously implemented systems and procedures within all aspects of the business. Or, events simply may be occurring so fast in the personal and professional lives of business owners and executive managers that they find it difficult to pull away from their daily revenue generating activities to take the necesary time to reevaluate and reassess their overall strategic growth plan; and to record their thoughts, ideas and strategies on paper.

Some businesses generate large volumes of revenue without adhering to solid management principles. However, for a business to not only achieve and maintain business success - but to reach its fullest potential and highest level of performance - solid management principles, planning and a focus on building and maintaining effective teams are needed during each of the three cycles of business development. This will ensure that the revenue, profitability and efficiency of any business, in any industry, is maximized during any economic cycle or stage of the business development cycle.

Editor's note: This series continues here with Part 2.