About this module
Hurray – your business is live, what’s next? In this module, we help bakers outline a business direction that’ll help them tailor and finetune their product strategy to better suit their customers. Learn about building strong connections with customers, expanding your business presence and so much more!
Now that you have the ropes to run your baking operations, it’s time to look at the strategic side of things. In this module, we help bakers outline a business direction that’ll help them tailor and finetune their product strategy to better suit their customers. Learn about building strong connections with customers, expanding your business presence and so much more!
Narration
When building a business from the ground up, understanding the stages of a business is so important for success. There is a time and place for everything.
The business lifecycle can be split into three simple stages – Survival, Growth and Expansion.
In fact, the nature of business growth is no different from the nature of human growth.
You have the Survival stage during childhood, Growth stage in adolescent years, and Expansion stage in adulthood. Then the cycle repeats, according to the economic cycle.
Survival is comparable to childhood – The main concern for the business at this stage is to make sure there is enough sales income to pay for its monthly expenses, in addition to refining its operations and product delivery.
The business is striving to be self-sustainable, to breakeven and turn a profit.
Businesses typically take 12 to 18 months to grow out of this phase.
This is a very labor intensive period that could also dry up your cash reserves. So, one should be mindful and do everything possible to become sustainable and move on to the next stage within 2 years.
Growth is comparable to adolescence – The business is now pursuing stability in its life cycle. As it grows in market presence and brand identity, it is working on securing key customers and clients to achieve a stable income.
Businesses typically take one to two years in this stage.
This is the time when businesses should pursue stability, so it is important stay focused and patient in developing talent and financial strength, without incurring too much risks and costs, so as to set a strong foundation for the expansion stage.
Expansion is comparable to adulthood – The business is now mature, and it has now built enough experience and muscle to overcome larger business risks in its pursuit to expand. This is the time for innovation and collaboration, a time to take on new projects, to diversify, and to take on bold strategies to earn a larger market share in the industry.
An advice to the ambitious businesses in this stage is to not only use the income to grow the business, but also to build your cash reserves and savings. This will give you an upper hand against your competitors in the next economic downturn or recession.
So how do we use this in practice? Let’s say an opportunity for a huge project in another city comes to you, which requires investment in time and money.
If you are in the survival stage, is it wise to take the project using emergency cash reserves? If it fails, are you ready to lose it all?
However, if you are in the expansion stage, you may not want to lose out on the opportunity. Knowing where you are will help you make a quick decisive move to secure the deal.
At this stage, you would have the manpower to expand, and financially, you would have enough profits or cash in your reserve, aka investment fund, to utilise for current needs.
And if it fails, you simply lose the investment fund, leaving your emergency funds untouched. You regroup and your business continues as usual.
In conclusion, it is important to know which stage you are in the business lifecycle. There is a time and place for everything – knowing where you are is crucial to make the right decisions for your business at the right time.
