November 15, 2025 • 33 mins
Every entrepreneur's journey follows a pattern, though rarely in a straight line. In this illuminating episode, we break down the five crucial stages of the business life cycle that every company experiences: Seed/Startup, Growth, Established/Maturity, Expansion/Renewal, and Decline/Exit.
Drawing from personal experience running multiple businesses, I share how identifying your current stage can prevent costly mistakes and unlock strategic opportunities. From the cash-strapped early days where you're wearing every hat imaginable to the established phase where complacency becomes your biggest threat, each stage demands different approaches and mindsets.
You'll discover practical strategies for each phase, including when to document processes (hint: much earlier than most entrepreneurs think), how to set meaningful KPIs that actually drive your business forward, and tactics for differentiating yourself as competitors take notice of your success. We examine real-world examples from manufacturing and service businesses, showing how tracking metrics like revenue-per-hour can transform your decision-making.
Perhaps most valuably, we explore the warning signs of business decline and the crossroads you'll face: revitalize through innovation or plan a strategic exit. Whether you're just launching your entrepreneurial journey or leading an established company, this episode provides a roadmap for navigating the inevitable cycles of business with confidence and purpose.
Ready to identify which stage your business is in and what steps to take next? Subscribe, share your experiences, or apply to be a guest by visiting www.lightupyourbusinesspodcast.com or emailing lightupyourbusinessllc@gmail.com.
Say goodbye to overwhelm and self-doubt, and hello to confidence and success. Join the Faith Filled Coaching family today and step into the abundant future you've always envisioned.
Visit FaithFilledCoach.com to schedule your free 30-minute consultation. Let's make your business dreams a reality, together.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Tammy Hershberger (00:01):
Welcome to the Light Up your Business
podcast, the show where we divedeep into the world of small
businesses.
I'm your host, TammyHershberger, and each episode
will bring you inspiring stories, expert insights and practical
tips to help your small businessthrive.
Whether you're an entrepreneurjust starting out or a seasoned
business owner, this podcast isyour go-to source for success in
(00:21):
the small business world.
Let's get started to source forsuccess in the small business
world.
Let's get started.
Hi everyone, this is Tammy withLight Up your Business podcast.
We are back for another episode.
Today.
I want to talk to you about thefour stages of the business
life cycle and I want to giveyou some practical strategies
for overcoming the challengesthat you will have, achieving
(00:43):
success within each phase ofthese.
This episode will basically bekind of a roadmap for navigating
the complexities of thebusiness life cycle and then
thriving in the ever-changinglandscape of business.
As you know, business is up,it's down.
I've seen, you know, massiveamounts of money coming in.
I've seen it tighten up alittle bit.
There's just kind of these lifecycles that happen and if
(01:06):
you've never owned a business oryou own a business and you're
saying I'm not sure which lifecycle I'm in.
We're going to talk about ittoday.
You're at the right place.
So there's five stages thatwe're going to go over, and some
of this came from the WNBfinancial website.
So if you're interested, go tothem.
They can give you some moreinformation on this.
So the first life cycle is theseed, or the startup, and what
(01:29):
that means is and I'll go onmore description here in a
minute, but briefly, it's likethe seed would be you've
conceptualized this idea rightof this business, this service.
You want to offer this product,whatever it is, and then you're
kind of getting that off theground, you're launching it, and
then you're like, okay, now Igot to start up this project,
right, start up the business,start up the manufacturing
(01:52):
process, whatever it is.
So you have that phase.
Then you have growth, whichmeans your business is growing.
Then you get to a point wherewhat's called established or
maturity, and it means that yourbusiness is established, it's
mature and it's kind of now justhumming along kind of nicely.
And then you have expansion andrenewal, and what that means is
(02:14):
you're either looking at newproducts, new things and we'll
go into more detail but oryou're expanding the business
into new locations morelocations, more product,
whatever.
And then the last one is declineexit.
What that means is after andthere's no like specific number
of years or whatever that yourbusiness will start to decline a
little bit.
You'll start to see somepullback in the market and there
could be different reasons forthat.
Or even maybe you're at a pointwhere you're burned out.
(02:37):
You don't want to do it.
You're at an age where you wantto retire and you start to
decide how you're going to exitthe business.
And just remember, no matterwhat stage that you're in, each
company is unique, notorganizations pass through every
stage.
Some spend more time in eachstage, longer than others.
Some never get out of a stageuntil, like it jumps the stage.
(02:57):
Maybe you're in the maturestage and you never saw the
expansion or decline because youdidn't want to grow and
thankfully you never, neverstarted to decline and so you
just want to exit.
It's just whatever.
I mean like, just know there's.
It's not linear.
It can kind of jump from one tothe next, depending on your
business.
So let's talk more about thefirst stage, which is the seed
(03:19):
startup business, and it's kindof like you're conceptualizing
this idea right and somehow youhave to get it're
conceptualizing this idea right,and somehow you have to get it
from conceptualization to launch.
You need to get that thinggoing.
So at this point usually yourbusiness is still kind of an
idea, right You're trying tothink about, like okay, I have
this great idea, I need to findclients.
How am I going to market it?
(03:40):
Where am I going to put it?
What's the location?
How much money do I need?
Like there's all these thingsthat are come up when you are
starting to launch a business,right, and if you're creating
products or services, obviouslyyou have to get your first
customer.
So in that stage you're goingto be doing a lot of heavy,
heavy advertising.
So in my case, I'm kind ofinteresting because I bought in
(04:02):
the barnyard that I own.
I bought this business it'sbeen nine and a half years ago
already and so at that point ithad been in business 20
something years, so it hadalready perfected the product.
To be honest with you, it hadsome marketing.
It had a brand, a good,excellent reputation.
So when I came in I didn't haveto do as much advertising per
(04:23):
se because it had namerecognition.
It had a lot of word of mouthFor me.
It was coming in and like, okay,obviously we have to learn how
to build this product, which wasno issue.
My husband figured that outquick.
It was more like how do wescale this bigger?
Because it was doing you know,six figures that we wanted to
get to seven figures.
And so we came in and we, youknow, changed the logo.
(04:45):
We made a website because atthe time it was owned by
Mennonites and so they didn'thave a website.
It was in like the phone bookand some stuff like that, but it
wasn't really online much.
It didn't have quickbooks, itdidn't really even use much for
computers.
So we had a lot of things thatwe wanted to do to kind of
expand it basically.
So for me it was already inlike stage three, the
established maturity stage, andI was going in expansion.
(05:08):
I wanted to expand it becausewe had the energy to where Dave,
after 10 years, was just likeI'm.
I've made a good life with it.
I don't want to do it anymore.
So again it can come intodifferent places.
But you know, for this partwe're talking about seed startup
.
So back to that.
Sorry, I got off on a tangentthere.
Anyway, you're going to beadvertising because no one knows
(05:28):
you exist.
No one knows who you are.
Right, with some of thesecompanies that I deal with in
coaching, it's the same issue.
They're like no one knowsyou're an art person or no one
knows you have an art business,no one knows you're a mobile
detailer or whatever.
It is right.
And so you've got to get yourname out there.
So you got to get that websitegoing.
You got to get marketing going,boots on the ground.
They always say in the servicesbusiness I had a window
(05:50):
cleaning business that if youdon't have the cash to put into
advertising you know to putFacebook ads out or to do social
media ads or billboards orwhatever you're trying to do
then you should do boots on theground.
You should be able to put doorhangers in yard signs.
You know advertising with yourmouth.
(06:11):
Basically, right, that's stuffthat's not that expensive to do.
And so at that stage again,you're trying to figure out the
product, the service, right, thename, the load.
I mean there's all these thingsthat go into starting a
business and I won't go intothat today.
But you're going to start to doresearch on the market.
Right, if you don't know themarket, you've got to research
it because you don't want tojust open up a business.
I can't even think of an idearight now, but let's just say I
(06:33):
own a coffee shop.
Well, if there's 50 coffeeshops in this small town already
it's probably oversaturated.
I'm probably not going to dovery good.
If you own a coffee shop andthere's one and it's a
good-sized town, you might.
Yeah, you got some greatpotential there, right?
So you want to see, like, okay,how many people in the area,
how much traffic, how is thearea I'm putting this coffee
shop?
Is there a bunch around us?
Is there one?
(06:53):
Is there none?
You know, maybe you can offersomething in the coffee shop
market that nobody else does.
Maybe they don't have adrive-thru at the other one
that's in town.
Well, that could be a new thingthat you could have, that
someone might come to youbecause you have a drive-thru,
whatever.
So you kind of want to get thebusiness model figured out of
what's it going to look like?
How many people do I need getyour business plan in order,
(07:14):
test your product, right?
So I was talking to a lady.
She wanted to do muffins and Itried.
I said, well, if you want to domuffins, you should probably do
some taste testing, right.
So start baking them, get youringredients, your recipes
figured out and then go startwith your friends, ask them to
taste it.
And you don't just go off oneperson's opinion because I don't
like lemon.
So if you have a lemon cupcakeor whatever, I'm not going to
(07:36):
like it, but that doesn't meanno one else is going to like it.
And so you want to develop theproduct, test it out, see what
people think, figure out theflaws, figure out the positives,
right, and then you kind ofhone in on that.
Now there is challenges.
I mean I've already listed some, but money is going to be so
tight in the beginning stage.
The reality is most likely youdon't have a bunch of money in
(07:56):
your bank account.
If you do, it's probablysavings or retirement that
you're now draining out to startthis business.
That is a scary thing.
I talked to someone thismorning and they're looking to
start their business andhonestly, they're scared.
It's like I don't have themoney.
If I quit my job, I'm not goingto have cash flow.
I'm scared.
You know you have to make thatcall up for yourself and talk to
(08:18):
the Lord about it, but none ofus have everlasting months of
money.
I wish, if you do call me, Iwould love to talk to you
because I don't.
It's always coming and going.
Just know that it's going to betight.
Sometimes you have to wear a lotof hats and sometimes you have
to cut expenses and be frugaland be creative, because you
don't have tons of money tothrow at something.
(08:39):
Like I said about the hats,you're wearing lots of hats,
you're doing sales, you're doingproduction.
You've, like I said about thehats, you're wearing lots of
hats, you're doing sales, you'redoing production, you're.
You know, you got to maybe bein the field.
You got to advertise and figureout the marketing side.
You're doing the bookkeeping,no-transcript.
And we hired out onsites to asubcontractor and deliveries to
(09:00):
a subcontractor.
So John was building, I wascleanup crew, I did the
bookkeeping, I did sales, youknow marketing all that stuff.
And then eventually John tookon the onsites, so he was doing
that as well.
And then we hired an office andI think we actually hired a
couple of eventually it was oneand then eventually another
carpenter to help build.
(09:21):
And then eventually I got to apoint where we hired an office
person, but for a long time itwas just John and I, and we did
all of it.
So just know you're going towear all those hats.
It helps you to be really smartwith your money, though,
because, not having a lot ofmoney, you're not throwing it
around, wasting it.
Another thing is creatingsystems and documenting
(09:41):
processes.
So I talk to some people nowand they're like well, it's just
me, or me and another guy, wedon't really need systems.
Well, believe it or not, youhave a procedure.
We all do it every day.
You get.
What's your procedure?
You're like what is that?
Well, when you get up in themorning, what's the first and
second and third thing you do?
That's a procedure.
So you get up, go to thebathroom, brush your teeth, have
(10:02):
coffee, read the Bible,whatever it is, that's your
procedure.
You want that for your people.
So if you have a salesperson Idon't know if the sales process
could be you know, reach out andtrack the customers that you've
reached out to, and then you dofollow up how many weeks, once,
twice, three times, track allthat follow-up and then where
(10:26):
are they at in the life cycle ofthe?
You know?
Are they time to come backagain for another service, or I
don't know, is it maintenancetime.
Maybe you need to get a hold ofthem for maintenance.
And then what's the process?
So we're tracking those clients, we know when they last got
their service, we know whenthey're due again, right.
And if you do that documentationnow, when you're really small,
it may seem kind of dumb at thetime because there's not that
many people to track or processthis stuff, because you're doing
it all.
But there's going to come apoint where you're going to grow
(10:46):
and then when you grow, it'straining for them.
It's something so you don'thave to always be bothered.
They will, you know, look atthe book maybe.
Or you can train off the bookand it's not all in your head.
I had a business partner whoeverything was in his head.
It took us.
I mean, I never got all of itout, but I got a lot of it out
because I was like I can'talways rely on you because if
you're not here, you're out oftown, you're on vacation, you're
(11:07):
sick, I can't get in your head,I need it on paper.
And so if you do that whenyou're smaller, it's going to
help you to document this stuff.
It's going to take way morework and it's going to be harder
.
And then there's hiring, andthose processes are part of
hiring right Hiring questions,hiring paperwork, your employee
(11:29):
paperwork, learning about hiring, getting the right hires.
What's the ads going to looklike?
There's a lot that goes intothis stuff.
And then you're going to needto establish a culture that
allows you for growth to growright.
So like, if everybody'squitting, everybody hates their
job, you're not gonna growbecause you're gonna constantly
be going through people andevery time you have to pay to
(11:50):
advertise, spend time and moneyto interview, it's just, you go
through so much money to getsomeone in a spot, so when you
get them, you want to keep them.
You need to find out what isthe problem, what's your culture
going to be?
This is all part of the seedstage.
Right, figuring this stuff out.
Okay, phase two, let's move onto that.
It's the growth phase.
So at this point, your conceptis working.
(12:12):
You're increasing in revenue,you're increasing in customers.
What do you expect from thispoint?
Well, the opportunities aremultiplying, but so are the
issues right.
The bigger your company gets,the bigger the problems get.
Profits are strong, but nowcompetitors might start to take
notice and they might be like,hey, now you have another
competitor you've got to dealwith.
Turnover starts to hopefullydecline in this stage because
(12:35):
you're getting your systems,you're getting the process,
you've got your culture figuredout, so you should be going
through less people At thispoint.
Clients are starting to seeyour company's value right, so
they're going to start promotingfor you, they're going to start
referring you, recommending you.
So you should have to do,hopefully, less advertising just
because word of mouth is huge.
It's going to depend on yourbusiness and what you're doing.
(12:56):
So don't just say that's I'mnot going to advertise, but in
my experiences it's been able tocut back a little bit because
the word of mouth is working.
You're figuring out at thispoint how do you want to scale
your business.
If you want to scale, how doyou do it right?
And then you really want toinvest in systems and people to
(13:17):
sustain the momentum, right?
So automate repetitive tasks.
Is there programs?
Because in the beginning youdon't always have money for all
the best software in the world,so a lot of the systems are on
spreadsheets or notebooks orwhatever.
But as you start to in thisgrowth phase, you should be
bringing some money in.
So you know, monday is reallygreat, airtable is really great.
Obviously, excel is alwaysfantastic.
(13:39):
Quickbooks is great foraccounting.
There's different things inHousecall Pro, if you're in the
window business whatever,there's these great softwares
that you can now start to spendmoney on to help you automate,
simplify, keep track of thingsorderly.
Because I'm going to tell you,if you have a business and you
have to track anything, which ismost any business whether it's
inventory, people, schedules,manufacturing, that kind of
(14:02):
stuff If you don't keep track ofit, it's going to turn into a
nightmare and you're going tohate your life.
So keep track now.
Don't make it so complicated.
Just know in the growth phaseit's very resource intensive.
So these are things you must do.
Okay, so the Bible according toTammy, here you need to set
purposeful goals, right?
What does purposeful mean?
(14:24):
You don't just willy-nillythrow in an idea of like, oh,
I'm going to hit $5 milliontoday.
Well, are you even doing close?
If you're doing $50,000 a month, that's like unrealistic.
So purposeful meaning it'sgoing to drive the business.
It's going to help push you,help push your salespeople, help
track the numbers in the backto see how manufacturer is doing
.
Track close rates for yoursalespeople, those kind of
(14:45):
things.
And one way to do that is toestablish key performance
indicators KPIs is what DaveRamsey calls them and that's to
measure your success.
So I have a couple examples foryou.
So if you're not sure what thatmeans, in my manufacturing
business we track how muchrevenue they're producing per
hour.
So they I don't do the math onit, dan does, but it's like they
(15:06):
built this many sheds, thismuch revenue, this many hours
and we figure it out and itcomes out to a revenue per hour.
And if we're in the 180 to 250,excellent, that's really good.
If I see it drop below that,then I got to dig into why.
Same thing in the windowcleaning business.
If you have a revenue per hourlet's just say 90 to 120, that's
(15:27):
a good zone, right.
If you go below that, you startto lose money or make no money.
Obviously, if you're over 120,I'd be curious what you're doing
, because that's really amazing.
But those are ways for you tosay, okay, this is a metric
that's trackable, right, smartgoals here.
So if it's this number and we'renot and this is our goal, our
purposeful goal and you're nothitting it, why are we not
hitting it?
What's the reason?
(15:47):
And you know it changes week byweek.
It may not be the same reason,but if it's consistently a
problem.
One, you don't have realisticgoals.
Two, maybe it's an employeeproblem.
Three maybe it's an employeeproblem.
Three, maybe it's a salesproblem, maybe it's a
manufacturing problem, butthat's where you, as the leader,
can either get on yourproduction step, your production
manager, or, if you don't havethem, it's you.
(16:10):
You go back and figure outwhat's going on.
Why is this not working?
But if you don't have thosegoals, you don't have KPIs.
You don't even know what's like.
Okay, that's great, I have noidea what's happening.
I talked to people who've talkto people who've.
Their business is really busy.
They're doing big numbers inrevenue.
You look at the profit lossthey're losing money and they're
hemorrhaging money and it'slike, okay, that's a problem.
You may be doing $5 million,but if you're not keeping any of
(16:30):
it and you're going in thewhole 500 grand, you're going to
be out of business.
You can't do that.
So that's where these numberscome in.
You want to maintain capital andI can tell you this is
interesting sometimes you needto have external funding or debt
to fuel the expansion, right?
So maybe you get lines ofcredit, credit cards.
I mean angel, investing,there's all these different ways
(16:51):
home equity, line of credit,whatever.
That's not the point.
The point is you need to bewatching your budgets, watching
your capital, forecasting howmuch money I need next month,
the next month, the next monthright, and knowing so that way,
like I mean.
One example is if you're gettingready to hire and you say, in
three months, I want to hirethree people, okay, great, well,
I'm going to use the windowcleaning business, for example.
(17:11):
If you want to hire three techs, are they all riding in one van
?
Are you going to have teams?
Are they going to be bythemselves?
Okay, you want them bythemselves.
Do you have vans for everybody?
No, well, then you got to thinkabout that, because now you
either have to lease vans, youhave to buy vans.
There's an expense that'scoming somewhere.
You need to forecast that in.
And then, typically, your techsare going to produce enough
(17:33):
revenue they should to pay forthat, but you have to make sure.
So then you go and set somemore KPIs, right.
Also, at this growth stage,you're going to have to start,
because there's competitors,there's all these things
happening.
You got to start to figure outhow you're going to set yourself
apart in the market, right?
What's going to be differentabout you from someone else?
So think about that.
(17:54):
You want to strengthen clientrelationships.
You want them loyal to you.
They will come back to you.
You do a good job, you have afair price, you treat them right
.
They will come back.
They're not going to leave youunless you do a bad job.
You start raising your pricesand they can't afford you, right
, there's things that happen,but create loyalty with them.
The other thing about loyalty isif you can gather feedback from
(18:18):
them, such as Google reviews.
That's what I highly recommend.
They're going to now promoteyour business for you on Google
because they're going to leave areview.
Hopefully it's five star, fouror five right, and they're going
to brag you up.
I love it when they mention mysalespeople in, like Callan or
Jonas or whoever, because it'slike people were like okay,
jonas did a great job.
And then they come to yourbusiness and they're like oh,
this is Jonas, I met this guy.
(18:39):
They kind of have thispreconceived notion of like this
guy's going to take care of me,right?
Whereas if you read, oh, tonywas terrible.
Well, if I go to a business, Idon't think I would go first off
.
But if I did, I'd be like, ohgosh, I got Tony.
I don't want to deal with TonyNow.
My perception's bad already.
Right, so get those reviews.
If you can create a referral orloyalty program, that's huge.
(18:59):
Right, because that helps torecommend you bring customers
back in, bring their neighborsin, whatever.
Just kind of think outside thebox what's ways we can do that.
You want to hire the rightpeople to help you grow the
business, because bad hires willkill your business.
It costs you so much money inactual cash.
It costs you so much grievanceswith yourself dealing with
(19:20):
problems, and then it frustratesyour culture because the people
get sick of working with thesepeople.
So make sure you're hiring theright people and then invest in
training programs, courses, youknow, anything that will help to
teach your people, grow yourpeople.
Let them learn more, keeps themfrom getting stagnant and bored
.
Right, keep them invested, andthen those things can obviously
(19:40):
help push your business more too.
Okay, stage three.
Hopefully you're still with me.
So so far we've talked aboutthe seed, startup and growth.
Now we're moving into yourestablished and your maturity
right.
So this is kind of where Ibought in the barnyard All those
years, 20, some years it'sestablished, it's mature, and
(20:01):
then my mindset was I want togrow this.
So if you're in this stage, yourcompany's stable, you're
recognized in the market, youhave loyal customers, so things
to keep in mind.
Sales growth slows to amanageable rate.
So sometimes, like when you'rein the growth stage, like when
you're first starting and itstarts to take off, your
business is insanely busy.
(20:21):
Like you hit the stage whereit's like I can't keep up.
Everything is insane, I havetoo many jobs.
All these things are happening,but at this stage it's starting
to level off now where it'smore manageable, and that's one
because of market share, but two, it's because you've got people
, you've got systems.
It's not so chaotic, it's notjust you anymore.
Right, your operations and yourcash flow become predictable.
(20:41):
So for the budgeting, in thebeginning you're making up
numbers that are educatednumbers, because you don't
actually know here I can.
I have almost 10 years ofrevenue numbers and sales
numbers and expense numbers thatI can go through and kind of
get an average of like onaverage.
We're spending this much Onaverage this time of year.
We sell this much, right, youcan some if you're a corporation
(21:03):
, usually at at this point youstart to pay dividends to
stockholders.
Now, like LLCs, we do it alittle different, but you have
brand recognition, right.
You're leveraging social mediaand SEO for broader reach.
You're buying materials,products in bulk, so your
margins are better, and thereason you're doing it in bulk
is because, like, if I buytruckloads of lumber, I get a
better price than if I just buya bunk of lumber, versus just
(21:25):
buying four sticks right, sothat all is helping to, because
you're mature, because you'rekeeping more profit right Now I
have to caution you because inthis stage, the problem that
happens and I've seen thishappen with one of my companies
is you become complacent andstagnant, and one of my
businesses wasn't me, but theother side became just kind of
(21:47):
like it's just easy street and Idon't want to do anything, I
don't want to grow it, and sowhen that happens, you have to
be careful because that'lldestroy your business, right, or
your partnership or whatever.
So, to overcome this, maybe youexpand your reach geographically
.
Maybe, instead of just being inGrand Junction, you go to
Montrose, you go to Denver, Idon't know.
Maybe you want to expandoutside your reach, right, make
(22:08):
your go into cities you weren'tin, go into I don't know
whatever the Lord's telling you.
Maybe you just want to expandsomewhere, collaborate with
other businesses, you know,reach out and start talking to
other businesses of how we cancollaborate together, because
then you get their customers,they get yours, and then maybe
even diversify your productoffering.
So, for example, with sheds, weused to build pretty.
(22:31):
I mean we could build anythingreally but a lot of it.
When I bought it was just basiceight by eights, eight by tens,
the more basic stuff.
Dave wasn't a huge fan ofcustom and since we've bought it
nine and a half years, we do somuch custom buildings I mean
really cool stuff because we'reopen to that.
That's what we like to do.
My guys get bored building thesame stuff, um.
So that has expanded us.
(22:51):
Our average tickets haveincreased because of that,
because we're building suchcustom stuff.
Now the other thing you got towatch out for is cost management
.
So you want to make sure youimplement strategies to optimize
operational efficiency andreduce waste, which can lead to
significant cost savings andbetter profit margins over time.
So the systems in place in theback of the barnyard are there
(23:18):
so that we're not wasting lumber, we're not spending way too
long on a certain design.
We always find, when we createa new design we did a chicken
coop recently because there wasso much design and everything
that went into it.
It's the first time we builtone like that very custom.
We didn't do as good on profitson that, if you will the
(23:39):
margins because we had so muchtime invested.
It wasn't so much materials, itwas time.
But, like we said, because wehad so much time invested, it
wasn't so much materials, it wastime.
But, like we said, if we hadbuilt that three, four, five
times, the fifth one's going tobe so much faster, the profit
margin is going to get better.
So you want to become reallyefficient right, with your time.
Maybe you want to acquire othercompanies and bring them in.
It depends on what your goalsare, right?
(23:59):
Maybe at this point you'reconsidering selling or merging
with another company.
Sometimes owners reinvest theirprofits for future growth.
Sometimes you split off productlines into separate companies
due to the size of eachindividual company, right, maybe
you've had two offerings andthey're just so big now it'd be
better to just separate theminto their own companies.
(24:20):
Then you have the fourth step,which expansion renewal.
So here the companydeliberately enters new markets
or distribution channels.
It requires significantinvestment but can reinvigorate
growth and prolong yourcompany's viability.
And you start investing in newtechnologies, new people, new
marketing, kind of to pivot backto the growth if you see that
(24:41):
your company's starting todecline.
So we kind of saw that withCOVID we just skyrocketed and
then the next couple of years itjust kind of not declined.
Well, I should say during thehighest we declined some, but
not overall, like we're stilldoing way bigger than when we
bought it, but we are startingto see a little decline.
So we have to start looking atlike do we need new marketing
channels?
Do we need new products?
What is it?
(25:02):
Something is changing right.
So what is it?
Maybe the market's just slowright now, but you got to watch
that because you don't wantconstant decline.
That's not good, okay.
So last stage is decline exit.
So if your company fails toinnovate or adjust to market
changes, revenues can start tofall.
(25:22):
Many owners in decline don'trealize it until it's too late.
They're just kind of heads inthe sand.
They're being kind of lazy andthey're like one day they wake
up and they're like, wow, oursales are in the toilet.
Well, I bet that's beenhappening for a while.
You just haven't been payingattention.
Now there's all kinds ofreasons for decline, but just
some of them are not expanding.
During maturity, right whenyou're in the beginning, you
(25:42):
stay too small too long.
You need new products orproduct designs.
The market's changing.
People want something differentthan what you're offering, or
the taste of people have changed, or whatever.
The industry is changing.
Technology is changing things.
I'm not in the technology world.
I can't even imagine, becauseyou create something and it's
outdated in no time and you'reconstantly having to re-innovate
(26:02):
that.
So when you're in decline, youhave two choices.
One is you can exit the company.
You can shut it down, sell it,cash out, get out.
You can reinvest.
It does require a lot ofcapital to do that because you
need to start looking at whatdoes my customers need and why
am I having to re-change this?
What changed about them?
(26:23):
So some strategies forrevitalizing declining
businesses.
We have operational efficiency.
You want to do a thoroughreview of operations to figure
out what is inefficient.
Is it production?
Is it ordering?
Is it the price we're payingfor materials?
Is it the customer sale process?
The web?
I don't know?
Whatever, it is something,check it out, see what's going
(26:44):
on.
So streamline those processes,reduce waste, automate tasks all
of that can help produce moreprofitability.
Look at cost management, assessand reduce unnecessary expenses
.
Maybe renegotiate contracts,reduce overhead.
Wherever you can Implement morecost-saving technologies, I mean
(27:10):
, one example would be when wefirst bought the building we're
in, we had like what's the word?
A non-fixed variable loan.
That was like I don't know, itwas like 8%.
It was horrible.
And I happened to talk tosomeone one day at a ribbon
cutting that I was after one ofmy businesses and this banker's
like, oh, we have all thesegreat loans.
I didn't care, I didn't want todeal with it.
My husband, thankfully, wassmart and he listened and he
kept bugging me.
He's like you need to talk toher and I was so busy I didn't
(27:32):
want to deal with it.
But thankfully he kept on meand I got serious about talking
to her and by switching loansfor our business, we moved from
eight percent variable to afixed rate for uh, two point, I
can't remember it was less thanthree percent.
I mean it was a huge costsavings like amazing.
(27:52):
So think about that.
Like that can save so muchmoney.
Renegotiating contracts withvendors, right.
Just, there's all these thingsthat you can do.
Start looking at insurance,like I did that.
I did that about three monthsago.
I started digging into ourexpenses and it's amazing all
the little expenses that creepin that you forget about, right?
And so we just started costcutting everywhere and I saved
(28:13):
quite a bit of money.
And it was like I should havedone that a long time ago, but I
was so busy I didn't.
So this is a good time to dothat.
Organizational changesrestructure teams or departments
to a better line with yourstrategic goals core competency,
competency focus, re-evaluatethe business's core competencies
and focus on what it does best.
(28:33):
So maybe it means scaling backon less profitable areas,
doubling down on strengths,right?
So an example of that would bewell, I'm gonna use window
cleaning.
So we did gutter cleaning,power washing, window cleaning.
We used to track like we didgutter cleaning, power washing,
window cleaning.
We used to track how muchgutter cleaning we did.
What was the profit margin,window cleaning?
And if out of those three let'sjust I'm making up something
(28:53):
here but just say power washingwas not making us any money and
it was time consuming and it hadthe most expense, if it's not
changing year after year.
Get rid of it.
Cut that line.
Cut that product line that'snot selling whatever and go in
and focus on the ones that aredoing well, because that's where
your money's being made.
Rebranding is something you cando Refresh the brand image to
(29:14):
appeal to new customers orchange perceptions, so it can be
a new logo, new messaging, newmarketing strategy.
We've gotten a few differentlogos.
My Barnier logo is locked innow, but we had some bad ones.
To start with, debt management.
Analyze and restructure debt toimprove cash flow.
This might include negotiatingbetter terms or consolidating
loans.
Again, I talked a little bitabout the mortgage.
(29:36):
Employee engagement.
Foster a culture of innovationand collaboration among
employees.
Encourage input and involvementin the revitalization process
to boost morale and commitment.
And then, when it's time toleave the company maybe it's due
to health or age or some lifechange there's a thing called
succession planning.
Dave Ramsey talked a lot aboutthis because he's in that stage
(29:58):
where he's starting to plan forhim to eventually walk away from
the company, because he'sgetting there.
So evaluate the key roles inyour organization.
Understand the skills andcompetencies required for each
position.
Identify gaps in leadershipthat need to be filled
continuously evaluate thesuccession plan and the progress
of identified talent, becauseyou know, I might, I don't know,
(30:19):
you might be doing one for fiveyears, ten years, whatever.
Well, some of those peoplemight your company things change
in their life and so now youdon't want to proceed with them
if they're not the right personfor the role anymore.
So you're always kind ofevaluating that, looking at it
again and you want to updatethat plan as needed to reflect
changes in the organization,marketing conditions changed or
employee developments havehappened.
(30:40):
Always embrace the journey ofentrepreneurship and adopt the
the challenges and opportunitiesof each stage.
So just one last reminder.
Again, it was seed, startup,growth, established or mature
business you're expanding orrenewing and decline, exit Okay,
that's the stages.
So think about it, take time,where are you at which stage?
And then take some of my adviceand go and start looking at
(31:03):
these things and see what we cando to get you to the next stage
or to grow or whatever it is.
You need to do so today.
I thank you for listening tothis episode.
I hope it brought insights foryou, no matter what stage of
business you're in.
If you enjoyed today's episode,subscribe, rate like, share.
Do all that stuff to help me befound.
Share like, share, you know.
(31:23):
Do all that stuff to help me befound.
Share with people you know thatmight find this interesting.
Make sure you email me if youwant to send me questions or you
have testimonies you want toshare.
I love all that stuff.
My email is lightupyourbusinessLLC at gmailcom.
And let's remember to continueto uplift and support one
another in lighting up ourbusinesses and our lives.
Visit us atwwwlightupyourbusinesspodcastcom
(31:46):
to share your experiences andinsights on navigating the
business life cycle.
If you're interested in being aguest on the show, apply
through our website or you canemail me.
We thank you all for listeningand we hope you have a great day
.
And remember in the world ofbusiness, every success story
begins with a passionate dreamand ends with a strategic
billion-dollar handshake.
(32:07):
Stay ambitious, stay innovativeand keep making those deals
that reshape tomorrow.
Thank you all for tuning in anduntil next time, remember.
Proverbs 3.3 says Let love andfaithfulness never leave you.
Bind them around your neck,write them on the tablet of your
heart.
That way you will win favor anda good name in the sight of God
(32:28):
and man.
And remember.
If you like what you heardtoday.
Click the follow button so younever miss an episode.
Welcome to the Light Up your Business
podcast, the show where we divedeep into the world of small
businesses.
I'm your host, TammyHershberger, and each episode
will bring you inspiring stories, expert insights and practical
tips to help your small businessthrive.
Whether you're an entrepreneurjust starting out or a seasoned
business owner, this podcast isyour go-to source for success in
(00:21):
the small business world.
Let's get started to source forsuccess in the small business
world.
Let's get started.
Hi everyone, this is Tammy withLight Up your Business podcast.
We are back for another episode.
Today.
I want to talk to you about thefour stages of the business
life cycle and I want to giveyou some practical strategies
for overcoming the challengesthat you will have, achieving
(00:43):
success within each phase ofthese.
This episode will basically bekind of a roadmap for navigating
the complexities of thebusiness life cycle and then
thriving in the ever-changinglandscape of business.
As you know, business is up,it's down.
I've seen, you know, massiveamounts of money coming in.
I've seen it tighten up alittle bit.
There's just kind of these lifecycles that happen and if
(01:06):
you've never owned a business oryou own a business and you're
saying I'm not sure which lifecycle I'm in.
We're going to talk about ittoday.
You're at the right place.
So there's five stages thatwe're going to go over, and some
of this came from the WNBfinancial website.
So if you're interested, go tothem.
They can give you some moreinformation on this.
So the first life cycle is theseed, or the startup, and what
(01:29):
that means is and I'll go onmore description here in a
minute, but briefly, it's likethe seed would be you've
conceptualized this idea rightof this business, this service.
You want to offer this product,whatever it is, and then you're
kind of getting that off theground, you're launching it, and
then you're like, okay, now Igot to start up this project,
right, start up the business,start up the manufacturing
(01:52):
process, whatever it is.
So you have that phase.
Then you have growth, whichmeans your business is growing.
Then you get to a point wherewhat's called established or
maturity, and it means that yourbusiness is established, it's
mature and it's kind of now justhumming along kind of nicely.
And then you have expansion andrenewal, and what that means is
(02:14):
you're either looking at newproducts, new things and we'll
go into more detail but oryou're expanding the business
into new locations morelocations, more product,
whatever.
And then the last one is declineexit.
What that means is after andthere's no like specific number
of years or whatever that yourbusiness will start to decline a
little bit.
You'll start to see somepullback in the market and there
could be different reasons forthat.
Or even maybe you're at a pointwhere you're burned out.
(02:37):
You don't want to do it.
You're at an age where you wantto retire and you start to
decide how you're going to exitthe business.
And just remember, no matterwhat stage that you're in, each
company is unique, notorganizations pass through every
stage.
Some spend more time in eachstage, longer than others.
Some never get out of a stageuntil, like it jumps the stage.
(02:57):
Maybe you're in the maturestage and you never saw the
expansion or decline because youdidn't want to grow and
thankfully you never, neverstarted to decline and so you
just want to exit.
It's just whatever.
I mean like, just know there's.
It's not linear.
It can kind of jump from one tothe next, depending on your
business.
So let's talk more about thefirst stage, which is the seed
(03:19):
startup business, and it's kindof like you're conceptualizing
this idea right and somehow youhave to get it're
conceptualizing this idea right,and somehow you have to get it
from conceptualization to launch.
You need to get that thinggoing.
So at this point usually yourbusiness is still kind of an
idea, right You're trying tothink about, like okay, I have
this great idea, I need to findclients.
How am I going to market it?
(03:40):
Where am I going to put it?
What's the location?
How much money do I need?
Like there's all these thingsthat are come up when you are
starting to launch a business,right, and if you're creating
products or services, obviouslyyou have to get your first
customer.
So in that stage you're goingto be doing a lot of heavy,
heavy advertising.
So in my case, I'm kind ofinteresting because I bought in
(04:02):
the barnyard that I own.
I bought this business it'sbeen nine and a half years ago
already and so at that point ithad been in business 20
something years, so it hadalready perfected the product.
To be honest with you, it hadsome marketing.
It had a brand, a good,excellent reputation.
So when I came in I didn't haveto do as much advertising per
(04:23):
se because it had namerecognition.
It had a lot of word of mouthFor me.
It was coming in and like, okay,obviously we have to learn how
to build this product, which wasno issue.
My husband figured that outquick.
It was more like how do wescale this bigger?
Because it was doing you know,six figures that we wanted to
get to seven figures.
And so we came in and we, youknow, changed the logo.
(04:45):
We made a website because atthe time it was owned by
Mennonites and so they didn'thave a website.
It was in like the phone bookand some stuff like that, but it
wasn't really online much.
It didn't have quickbooks, itdidn't really even use much for
computers.
So we had a lot of things thatwe wanted to do to kind of
expand it basically.
So for me it was already inlike stage three, the
established maturity stage, andI was going in expansion.
(05:08):
I wanted to expand it becausewe had the energy to where Dave,
after 10 years, was just likeI'm.
I've made a good life with it.
I don't want to do it anymore.
So again it can come intodifferent places.
But you know, for this partwe're talking about seed startup
.
So back to that.
Sorry, I got off on a tangentthere.
Anyway, you're going to beadvertising because no one knows
(05:28):
you exist.
No one knows who you are.
Right, with some of thesecompanies that I deal with in
coaching, it's the same issue.
They're like no one knowsyou're an art person or no one
knows you have an art business,no one knows you're a mobile
detailer or whatever.
It is right.
And so you've got to get yourname out there.
So you got to get that websitegoing.
You got to get marketing going,boots on the ground.
They always say in the servicesbusiness I had a window
(05:50):
cleaning business that if youdon't have the cash to put into
advertising you know to putFacebook ads out or to do social
media ads or billboards orwhatever you're trying to do
then you should do boots on theground.
You should be able to put doorhangers in yard signs.
You know advertising with yourmouth.
(06:11):
Basically, right, that's stuffthat's not that expensive to do.
And so at that stage again,you're trying to figure out the
product, the service, right, thename, the load.
I mean there's all these thingsthat go into starting a
business and I won't go intothat today.
But you're going to start to doresearch on the market.
Right, if you don't know themarket, you've got to research
it because you don't want tojust open up a business.
I can't even think of an idearight now, but let's just say I
(06:33):
own a coffee shop.
Well, if there's 50 coffeeshops in this small town already
it's probably oversaturated.
I'm probably not going to dovery good.
If you own a coffee shop andthere's one and it's a
good-sized town, you might.
Yeah, you got some greatpotential there, right?
So you want to see, like, okay,how many people in the area,
how much traffic, how is thearea I'm putting this coffee
shop?
Is there a bunch around us?
Is there one?
(06:53):
Is there none?
You know, maybe you can offersomething in the coffee shop
market that nobody else does.
Maybe they don't have adrive-thru at the other one
that's in town.
Well, that could be a new thingthat you could have, that
someone might come to youbecause you have a drive-thru,
whatever.
So you kind of want to get thebusiness model figured out of
what's it going to look like?
How many people do I need getyour business plan in order,
(07:14):
test your product, right?
So I was talking to a lady.
She wanted to do muffins and Itried.
I said, well, if you want to domuffins, you should probably do
some taste testing, right.
So start baking them, get youringredients, your recipes
figured out and then go startwith your friends, ask them to
taste it.
And you don't just go off oneperson's opinion because I don't
like lemon.
So if you have a lemon cupcakeor whatever, I'm not going to
(07:36):
like it, but that doesn't meanno one else is going to like it.
And so you want to develop theproduct, test it out, see what
people think, figure out theflaws, figure out the positives,
right, and then you kind ofhone in on that.
Now there is challenges.
I mean I've already listed some, but money is going to be so
tight in the beginning stage.
The reality is most likely youdon't have a bunch of money in
(07:56):
your bank account.
If you do, it's probablysavings or retirement that
you're now draining out to startthis business.
That is a scary thing.
I talked to someone thismorning and they're looking to
start their business andhonestly, they're scared.
It's like I don't have themoney.
If I quit my job, I'm not goingto have cash flow.
I'm scared.
You know you have to make thatcall up for yourself and talk to
(08:18):
the Lord about it, but none ofus have everlasting months of
money.
I wish, if you do call me, Iwould love to talk to you
because I don't.
It's always coming and going.
Just know that it's going to betight.
Sometimes you have to wear a lotof hats and sometimes you have
to cut expenses and be frugaland be creative, because you
don't have tons of money tothrow at something.
(08:39):
Like I said about the hats,you're wearing lots of hats,
you're doing sales, you're doingproduction.
You've, like I said about thehats, you're wearing lots of
hats, you're doing sales, you'redoing production, you're.
You know, you got to maybe bein the field.
You got to advertise and figureout the marketing side.
You're doing the bookkeeping,no-transcript.
And we hired out onsites to asubcontractor and deliveries to
(09:00):
a subcontractor.
So John was building, I wascleanup crew, I did the
bookkeeping, I did sales, youknow marketing all that stuff.
And then eventually John tookon the onsites, so he was doing
that as well.
And then we hired an office andI think we actually hired a
couple of eventually it was oneand then eventually another
carpenter to help build.
(09:21):
And then eventually I got to apoint where we hired an office
person, but for a long time itwas just John and I, and we did
all of it.
So just know you're going towear all those hats.
It helps you to be really smartwith your money, though,
because, not having a lot ofmoney, you're not throwing it
around, wasting it.
Another thing is creatingsystems and documenting
(09:41):
processes.
So I talk to some people nowand they're like well, it's just
me, or me and another guy, wedon't really need systems.
Well, believe it or not, youhave a procedure.
We all do it every day.
You get.
What's your procedure?
You're like what is that?
Well, when you get up in themorning, what's the first and
second and third thing you do?
That's a procedure.
So you get up, go to thebathroom, brush your teeth, have
(10:02):
coffee, read the Bible,whatever it is, that's your
procedure.
You want that for your people.
So if you have a salesperson Idon't know if the sales process
could be you know, reach out andtrack the customers that you've
reached out to, and then you dofollow up how many weeks, once,
twice, three times, track allthat follow-up and then where
(10:26):
are they at in the life cycle ofthe?
You know?
Are they time to come backagain for another service, or I
don't know, is it maintenancetime.
Maybe you need to get a hold ofthem for maintenance.
And then what's the process?
So we're tracking those clients, we know when they last got
their service, we know whenthey're due again, right.
And if you do that documentationnow, when you're really small,
it may seem kind of dumb at thetime because there's not that
many people to track or processthis stuff, because you're doing
it all.
But there's going to come apoint where you're going to grow
(10:46):
and then when you grow, it'straining for them.
It's something so you don'thave to always be bothered.
They will, you know, look atthe book maybe.
Or you can train off the bookand it's not all in your head.
I had a business partner whoeverything was in his head.
It took us.
I mean, I never got all of itout, but I got a lot of it out
because I was like I can'talways rely on you because if
you're not here, you're out oftown, you're on vacation, you're
(11:07):
sick, I can't get in your head,I need it on paper.
And so if you do that whenyou're smaller, it's going to
help you to document this stuff.
It's going to take way morework and it's going to be harder
.
And then there's hiring, andthose processes are part of
hiring right Hiring questions,hiring paperwork, your employee
(11:29):
paperwork, learning about hiring, getting the right hires.
What's the ads going to looklike?
There's a lot that goes intothis stuff.
And then you're going to needto establish a culture that
allows you for growth to growright.
So like, if everybody'squitting, everybody hates their
job, you're not gonna growbecause you're gonna constantly
be going through people andevery time you have to pay to
(11:50):
advertise, spend time and moneyto interview, it's just, you go
through so much money to getsomeone in a spot, so when you
get them, you want to keep them.
You need to find out what isthe problem, what's your culture
going to be?
This is all part of the seedstage.
Right, figuring this stuff out.
Okay, phase two, let's move onto that.
It's the growth phase.
So at this point, your conceptis working.
(12:12):
You're increasing in revenue,you're increasing in customers.
What do you expect from thispoint?
Well, the opportunities aremultiplying, but so are the
issues right.
The bigger your company gets,the bigger the problems get.
Profits are strong, but nowcompetitors might start to take
notice and they might be like,hey, now you have another
competitor you've got to dealwith.
Turnover starts to hopefullydecline in this stage because
(12:35):
you're getting your systems,you're getting the process,
you've got your culture figuredout, so you should be going
through less people At thispoint.
Clients are starting to seeyour company's value right, so
they're going to start promotingfor you, they're going to start
referring you, recommending you.
So you should have to do,hopefully, less advertising just
because word of mouth is huge.
It's going to depend on yourbusiness and what you're doing.
(12:56):
So don't just say that's I'mnot going to advertise, but in
my experiences it's been able tocut back a little bit because
the word of mouth is working.
You're figuring out at thispoint how do you want to scale
your business.
If you want to scale, how doyou do it right?
And then you really want toinvest in systems and people to
(13:17):
sustain the momentum, right?
So automate repetitive tasks.
Is there programs?
Because in the beginning youdon't always have money for all
the best software in the world,so a lot of the systems are on
spreadsheets or notebooks orwhatever.
But as you start to in thisgrowth phase, you should be
bringing some money in.
So you know, monday is reallygreat, airtable is really great.
Obviously, excel is alwaysfantastic.
(13:39):
Quickbooks is great foraccounting.
There's different things inHousecall Pro, if you're in the
window business whatever,there's these great softwares
that you can now start to spendmoney on to help you automate,
simplify, keep track of thingsorderly.
Because I'm going to tell you,if you have a business and you
have to track anything, which ismost any business whether it's
inventory, people, schedules,manufacturing, that kind of
(14:02):
stuff If you don't keep track ofit, it's going to turn into a
nightmare and you're going tohate your life.
So keep track now.
Don't make it so complicated.
Just know in the growth phaseit's very resource intensive.
So these are things you must do.
Okay, so the Bible according toTammy, here you need to set
purposeful goals, right?
What does purposeful mean?
(14:24):
You don't just willy-nillythrow in an idea of like, oh,
I'm going to hit $5 milliontoday.
Well, are you even doing close?
If you're doing $50,000 a month, that's like unrealistic.
So purposeful meaning it'sgoing to drive the business.
It's going to help push you,help push your salespeople, help
track the numbers in the backto see how manufacturer is doing
.
Track close rates for yoursalespeople, those kind of
(14:45):
things.
And one way to do that is toestablish key performance
indicators KPIs is what DaveRamsey calls them and that's to
measure your success.
So I have a couple examples foryou.
So if you're not sure what thatmeans, in my manufacturing
business we track how muchrevenue they're producing per
hour.
So they I don't do the math onit, dan does, but it's like they
(15:06):
built this many sheds, thismuch revenue, this many hours
and we figure it out and itcomes out to a revenue per hour.
And if we're in the 180 to 250,excellent, that's really good.
If I see it drop below that,then I got to dig into why.
Same thing in the windowcleaning business.
If you have a revenue per hourlet's just say 90 to 120, that's
(15:27):
a good zone, right.
If you go below that, you startto lose money or make no money.
Obviously, if you're over 120,I'd be curious what you're doing
, because that's really amazing.
But those are ways for you tosay, okay, this is a metric
that's trackable, right, smartgoals here.
So if it's this number and we'renot and this is our goal, our
purposeful goal and you're nothitting it, why are we not
hitting it?
What's the reason?
(15:47):
And you know it changes week byweek.
It may not be the same reason,but if it's consistently a
problem.
One, you don't have realisticgoals.
Two, maybe it's an employeeproblem.
Three maybe it's an employeeproblem.
Three, maybe it's a salesproblem, maybe it's a
manufacturing problem, butthat's where you, as the leader,
can either get on yourproduction step, your production
manager, or, if you don't havethem, it's you.
(16:10):
You go back and figure outwhat's going on.
Why is this not working?
But if you don't have thosegoals, you don't have KPIs.
You don't even know what's like.
Okay, that's great, I have noidea what's happening.
I talked to people who've talkto people who've.
Their business is really busy.
They're doing big numbers inrevenue.
You look at the profit lossthey're losing money and they're
hemorrhaging money and it'slike, okay, that's a problem.
You may be doing $5 million,but if you're not keeping any of
(16:30):
it and you're going in thewhole 500 grand, you're going to
be out of business.
You can't do that.
So that's where these numberscome in.
You want to maintain capital andI can tell you this is
interesting sometimes you needto have external funding or debt
to fuel the expansion, right?
So maybe you get lines ofcredit, credit cards.
I mean angel, investing,there's all these different ways
(16:51):
home equity, line of credit,whatever.
That's not the point.
The point is you need to bewatching your budgets, watching
your capital, forecasting howmuch money I need next month,
the next month, the next monthright, and knowing so that way,
like I mean.
One example is if you're gettingready to hire and you say, in
three months, I want to hirethree people, okay, great, well,
I'm going to use the windowcleaning business, for example.
(17:11):
If you want to hire three techs, are they all riding in one van
?
Are you going to have teams?
Are they going to be bythemselves?
Okay, you want them bythemselves.
Do you have vans for everybody?
No, well, then you got to thinkabout that, because now you
either have to lease vans, youhave to buy vans.
There's an expense that'scoming somewhere.
You need to forecast that in.
And then, typically, your techsare going to produce enough
(17:33):
revenue they should to pay forthat, but you have to make sure.
So then you go and set somemore KPIs, right.
Also, at this growth stage,you're going to have to start,
because there's competitors,there's all these things
happening.
You got to start to figure outhow you're going to set yourself
apart in the market, right?
What's going to be differentabout you from someone else?
So think about that.
(17:54):
You want to strengthen clientrelationships.
You want them loyal to you.
They will come back to you.
You do a good job, you have afair price, you treat them right
.
They will come back.
They're not going to leave youunless you do a bad job.
You start raising your pricesand they can't afford you, right
, there's things that happen,but create loyalty with them.
The other thing about loyalty isif you can gather feedback from
(18:18):
them, such as Google reviews.
That's what I highly recommend.
They're going to now promoteyour business for you on Google
because they're going to leave areview.
Hopefully it's five star, fouror five right, and they're going
to brag you up.
I love it when they mention mysalespeople in, like Callan or
Jonas or whoever, because it'slike people were like okay,
jonas did a great job.
And then they come to yourbusiness and they're like oh,
this is Jonas, I met this guy.
(18:39):
They kind of have thispreconceived notion of like this
guy's going to take care of me,right?
Whereas if you read, oh, tonywas terrible.
Well, if I go to a business, Idon't think I would go first off
.
But if I did, I'd be like, ohgosh, I got Tony.
I don't want to deal with TonyNow.
My perception's bad already.
Right, so get those reviews.
If you can create a referral orloyalty program, that's huge.
(18:59):
Right, because that helps torecommend you bring customers
back in, bring their neighborsin, whatever.
Just kind of think outside thebox what's ways we can do that.
You want to hire the rightpeople to help you grow the
business, because bad hires willkill your business.
It costs you so much money inactual cash.
It costs you so much grievanceswith yourself dealing with
(19:20):
problems, and then it frustratesyour culture because the people
get sick of working with thesepeople.
So make sure you're hiring theright people and then invest in
training programs, courses, youknow, anything that will help to
teach your people, grow yourpeople.
Let them learn more, keeps themfrom getting stagnant and bored
.
Right, keep them invested, andthen those things can obviously
(19:40):
help push your business more too.
Okay, stage three.
Hopefully you're still with me.
So so far we've talked aboutthe seed, startup and growth.
Now we're moving into yourestablished and your maturity
right.
So this is kind of where Ibought in the barnyard All those
years, 20, some years it'sestablished, it's mature, and
(20:01):
then my mindset was I want togrow this.
So if you're in this stage, yourcompany's stable, you're
recognized in the market, youhave loyal customers, so things
to keep in mind.
Sales growth slows to amanageable rate.
So sometimes, like when you'rein the growth stage, like when
you're first starting and itstarts to take off, your
business is insanely busy.
(20:21):
Like you hit the stage whereit's like I can't keep up.
Everything is insane, I havetoo many jobs.
All these things are happening,but at this stage it's starting
to level off now where it'smore manageable, and that's one
because of market share, but two, it's because you've got people
, you've got systems.
It's not so chaotic, it's notjust you anymore.
Right, your operations and yourcash flow become predictable.
(20:41):
So for the budgeting, in thebeginning you're making up
numbers that are educatednumbers, because you don't
actually know here I can.
I have almost 10 years ofrevenue numbers and sales
numbers and expense numbers thatI can go through and kind of
get an average of like onaverage.
We're spending this much Onaverage this time of year.
We sell this much, right, youcan some if you're a corporation
(21:03):
, usually at at this point youstart to pay dividends to
stockholders.
Now, like LLCs, we do it alittle different, but you have
brand recognition, right.
You're leveraging social mediaand SEO for broader reach.
You're buying materials,products in bulk, so your
margins are better, and thereason you're doing it in bulk
is because, like, if I buytruckloads of lumber, I get a
better price than if I just buya bunk of lumber, versus just
(21:25):
buying four sticks right, sothat all is helping to, because
you're mature, because you'rekeeping more profit right Now I
have to caution you because inthis stage, the problem that
happens and I've seen thishappen with one of my companies
is you become complacent andstagnant, and one of my
businesses wasn't me, but theother side became just kind of
(21:47):
like it's just easy street and Idon't want to do anything, I
don't want to grow it, and sowhen that happens, you have to
be careful because that'lldestroy your business, right, or
your partnership or whatever.
So, to overcome this, maybe youexpand your reach geographically
.
Maybe, instead of just being inGrand Junction, you go to
Montrose, you go to Denver, Idon't know.
Maybe you want to expandoutside your reach, right, make
(22:08):
your go into cities you weren'tin, go into I don't know
whatever the Lord's telling you.
Maybe you just want to expandsomewhere, collaborate with
other businesses, you know,reach out and start talking to
other businesses of how we cancollaborate together, because
then you get their customers,they get yours, and then maybe
even diversify your productoffering.
So, for example, with sheds, weused to build pretty.
(22:31):
I mean we could build anythingreally but a lot of it.
When I bought it was just basiceight by eights, eight by tens,
the more basic stuff.
Dave wasn't a huge fan ofcustom and since we've bought it
nine and a half years, we do somuch custom buildings I mean
really cool stuff because we'reopen to that.
That's what we like to do.
My guys get bored building thesame stuff, um.
So that has expanded us.
(22:51):
Our average tickets haveincreased because of that,
because we're building suchcustom stuff.
Now the other thing you got towatch out for is cost management
.
So you want to make sure youimplement strategies to optimize
operational efficiency andreduce waste, which can lead to
significant cost savings andbetter profit margins over time.
So the systems in place in theback of the barnyard are there
(23:18):
so that we're not wasting lumber, we're not spending way too
long on a certain design.
We always find, when we createa new design we did a chicken
coop recently because there wasso much design and everything
that went into it.
It's the first time we builtone like that very custom.
We didn't do as good on profitson that, if you will the
(23:39):
margins because we had so muchtime invested.
It wasn't so much materials, itwas time.
But, like we said, because wehad so much time invested, it
wasn't so much materials, it wastime.
But, like we said, if we hadbuilt that three, four, five
times, the fifth one's going tobe so much faster, the profit
margin is going to get better.
So you want to become reallyefficient right, with your time.
Maybe you want to acquire othercompanies and bring them in.
It depends on what your goalsare, right?
(23:59):
Maybe at this point you'reconsidering selling or merging
with another company.
Sometimes owners reinvest theirprofits for future growth.
Sometimes you split off productlines into separate companies
due to the size of eachindividual company, right, maybe
you've had two offerings andthey're just so big now it'd be
better to just separate theminto their own companies.
(24:20):
Then you have the fourth step,which expansion renewal.
So here the companydeliberately enters new markets
or distribution channels.
It requires significantinvestment but can reinvigorate
growth and prolong yourcompany's viability.
And you start investing in newtechnologies, new people, new
marketing, kind of to pivot backto the growth if you see that
(24:41):
your company's starting todecline.
So we kind of saw that withCOVID we just skyrocketed and
then the next couple of years itjust kind of not declined.
Well, I should say during thehighest we declined some, but
not overall, like we're stilldoing way bigger than when we
bought it, but we are startingto see a little decline.
So we have to start looking atlike do we need new marketing
channels?
Do we need new products?
What is it?
(25:02):
Something is changing right.
So what is it?
Maybe the market's just slowright now, but you got to watch
that because you don't wantconstant decline.
That's not good, okay.
So last stage is decline exit.
So if your company fails toinnovate or adjust to market
changes, revenues can start tofall.
(25:22):
Many owners in decline don'trealize it until it's too late.
They're just kind of heads inthe sand.
They're being kind of lazy andthey're like one day they wake
up and they're like, wow, oursales are in the toilet.
Well, I bet that's beenhappening for a while.
You just haven't been payingattention.
Now there's all kinds ofreasons for decline, but just
some of them are not expanding.
During maturity, right whenyou're in the beginning, you
(25:42):
stay too small too long.
You need new products orproduct designs.
The market's changing.
People want something differentthan what you're offering, or
the taste of people have changed, or whatever.
The industry is changing.
Technology is changing things.
I'm not in the technology world.
I can't even imagine, becauseyou create something and it's
outdated in no time and you'reconstantly having to re-innovate
(26:02):
that.
So when you're in decline, youhave two choices.
One is you can exit the company.
You can shut it down, sell it,cash out, get out.
You can reinvest.
It does require a lot ofcapital to do that because you
need to start looking at whatdoes my customers need and why
am I having to re-change this?
What changed about them?
(26:23):
So some strategies forrevitalizing declining
businesses.
We have operational efficiency.
You want to do a thoroughreview of operations to figure
out what is inefficient.
Is it production?
Is it ordering?
Is it the price we're payingfor materials?
Is it the customer sale process?
The web?
I don't know?
Whatever, it is something,check it out, see what's going
(26:44):
on.
So streamline those processes,reduce waste, automate tasks all
of that can help produce moreprofitability.
Look at cost management, assessand reduce unnecessary expenses
.
Maybe renegotiate contracts,reduce overhead.
Wherever you can Implement morecost-saving technologies, I mean
(27:10):
, one example would be when wefirst bought the building we're
in, we had like what's the word?
A non-fixed variable loan.
That was like I don't know, itwas like 8%.
It was horrible.
And I happened to talk tosomeone one day at a ribbon
cutting that I was after one ofmy businesses and this banker's
like, oh, we have all thesegreat loans.
I didn't care, I didn't want todeal with it.
My husband, thankfully, wassmart and he listened and he
kept bugging me.
He's like you need to talk toher and I was so busy I didn't
(27:32):
want to deal with it.
But thankfully he kept on meand I got serious about talking
to her and by switching loansfor our business, we moved from
eight percent variable to afixed rate for uh, two point, I
can't remember it was less thanthree percent.
I mean it was a huge costsavings like amazing.
(27:52):
So think about that.
Like that can save so muchmoney.
Renegotiating contracts withvendors, right.
Just, there's all these thingsthat you can do.
Start looking at insurance,like I did that.
I did that about three monthsago.
I started digging into ourexpenses and it's amazing all
the little expenses that creepin that you forget about, right?
And so we just started costcutting everywhere and I saved
(28:13):
quite a bit of money.
And it was like I should havedone that a long time ago, but I
was so busy I didn't.
So this is a good time to dothat.
Organizational changesrestructure teams or departments
to a better line with yourstrategic goals core competency,
competency focus, re-evaluatethe business's core competencies
and focus on what it does best.
(28:33):
So maybe it means scaling backon less profitable areas,
doubling down on strengths,right?
So an example of that would bewell, I'm gonna use window
cleaning.
So we did gutter cleaning,power washing, window cleaning.
We used to track like we didgutter cleaning, power washing,
window cleaning.
We used to track how muchgutter cleaning we did.
What was the profit margin,window cleaning?
And if out of those three let'sjust I'm making up something
(28:53):
here but just say power washingwas not making us any money and
it was time consuming and it hadthe most expense, if it's not
changing year after year.
Get rid of it.
Cut that line.
Cut that product line that'snot selling whatever and go in
and focus on the ones that aredoing well, because that's where
your money's being made.
Rebranding is something you cando Refresh the brand image to
(29:14):
appeal to new customers orchange perceptions, so it can be
a new logo, new messaging, newmarketing strategy.
We've gotten a few differentlogos.
My Barnier logo is locked innow, but we had some bad ones.
To start with, debt management.
Analyze and restructure debt toimprove cash flow.
This might include negotiatingbetter terms or consolidating
loans.
Again, I talked a little bitabout the mortgage.
(29:36):
Employee engagement.
Foster a culture of innovationand collaboration among
employees.
Encourage input and involvementin the revitalization process
to boost morale and commitment.
And then, when it's time toleave the company maybe it's due
to health or age or some lifechange there's a thing called
succession planning.
Dave Ramsey talked a lot aboutthis because he's in that stage
(29:58):
where he's starting to plan forhim to eventually walk away from
the company, because he'sgetting there.
So evaluate the key roles inyour organization.
Understand the skills andcompetencies required for each
position.
Identify gaps in leadershipthat need to be filled
continuously evaluate thesuccession plan and the progress
of identified talent, becauseyou know, I might, I don't know,
(30:19):
you might be doing one for fiveyears, ten years, whatever.
Well, some of those peoplemight your company things change
in their life and so now youdon't want to proceed with them
if they're not the right personfor the role anymore.
So you're always kind ofevaluating that, looking at it
again and you want to updatethat plan as needed to reflect
changes in the organization,marketing conditions changed or
employee developments havehappened.
(30:40):
Always embrace the journey ofentrepreneurship and adopt the
the challenges and opportunitiesof each stage.
So just one last reminder.
Again, it was seed, startup,growth, established or mature
business you're expanding orrenewing and decline, exit Okay,
that's the stages.
So think about it, take time,where are you at which stage?
And then take some of my adviceand go and start looking at
(31:03):
these things and see what we cando to get you to the next stage
or to grow or whatever it is.
You need to do so today.
I thank you for listening tothis episode.
I hope it brought insights foryou, no matter what stage of
business you're in.
If you enjoyed today's episode,subscribe, rate like, share.
Do all that stuff to help me befound.
Share like, share, you know.
(31:23):
Do all that stuff to help me befound.
Share with people you know thatmight find this interesting.
Make sure you email me if youwant to send me questions or you
have testimonies you want toshare.
I love all that stuff.
My email is lightupyourbusinessLLC at gmailcom.
And let's remember to continueto uplift and support one
another in lighting up ourbusinesses and our lives.
Visit us atwwwlightupyourbusinesspodcastcom
(31:46):
to share your experiences andinsights on navigating the
business life cycle.
If you're interested in being aguest on the show, apply
through our website or you canemail me.
We thank you all for listeningand we hope you have a great day
.
And remember in the world ofbusiness, every success story
begins with a passionate dreamand ends with a strategic
billion-dollar handshake.
(32:07):
Stay ambitious, stay innovativeand keep making those deals
that reshape tomorrow.
Thank you all for tuning in anduntil next time, remember.
Proverbs 3.3 says Let love andfaithfulness never leave you.
Bind them around your neck,write them on the tablet of your
heart.
That way you will win favor anda good name in the sight of God
(32:28):
and man.
And remember.
If you like what you heardtoday.
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