Preparing for the Maturity phase
Welcome to the final episode in our series of Eddie Senatore Talking Business, based on our monthly two-page newsletter. In this fifth installment, we look at how a business passes through the expansion phase, and settles into its lasting state of maturity.
At this phase, we’ve made it! We’ve survived, we’ve got our finances intact, we’ve got growth and then expanded. Now we’ve been in business for 20-to-25 years and need to look at the big picture.
You and your company will be facing existential questions as you decide where to go from here.
The three major issues facing a business in the Maturity phase
- Let’s say your house-building company has been at it for over 20 years. Now is the time to be asking yourself some lifestyle questions. Do you want to still be in business? Do you want to leave it as a legacy to pass to your children? Or do you want to start something else and sell the company? What about just retiring and living by the beach?Make sure you identify your values and figure out what you really want out of the rest of your life.
- You also need to worry about marketplace transformations and stagnation. Has the marketplace changed so much that new competitors are threatening the company with cost-effectiveness or value propositions? If that’s the case, you may need to be innovative to stay relevant.No company is immune to this. Even a company like McDonald’s is much more different than it was a few years ago, with new offerings on its menu, a dedicated cafe, and automated self-serve kiosks to provide more modern service. Even at maturity, the business will need to do a lot of work to stay afloat.
- Finally, you need to set a succession plan. You’ve spent so long building the business to where it is now, but how do you maximize its value for the future? It’s hard to do that without a plan for a future when you let go of the reins.If you have a passionate management team, then you may be able to find a potential successor from it? Perhaps you could sell your shares to a successor over time, and gradually cede control of the company. It takes a long time to get succession plan to work so make sure you start thinking of one early to get it done right.
You’ve made it!
Congratulations on the success of your business. At this stage, the future is what you make of it. You just need to reflect on what you want and make plans accordingly.
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