To be a strategist and visionary, one needs to be able, from time to time, to lean back and just allow your thoughts about your enterprise to flow. (As one CEO described it: “Drawing doodles most of the day is part of my job.”)
Question:
What would you regard as the core responsibility of a CEO/Business Owner/Founder/Manager?
Answer:
Strategy and Vision, i.e. defining the company's mission, long-term goals, and strategic direction.
Watch the Cycles
A business consists of perpetual cycles and systems. One very rewarding exercise is to reflect on all the cycles—from inception of your dream to the full realisation; the day-to-day frenzy of busy-ness and the visions you harbour for the years ahead.
In this blog we will help you to pause for a few moments in order to gain that all important eagle’s view over the processes in your business. A few minutes of contemplation to reset, and regain perspective on where you and your business are at this particular point, as well as where you’re heading and what needs to be done to get there.
Cycles within Cycles
We will take an overview of some of the cycles of a business and then the cycles within those cycles. See if you can spot where your business is positioned right now as well as the cycles that need attention:
The Launch/Start-Up: This is the time of high risk, high cash consumption, low sales, negative cash flow.
Growth: Rapid sales increase, positive cash flow, process formalisation.
Maturity: Steady revenue, peak efficiency, high competition. Consolidation likely to occur, the focus shifts to efficiency and maintaining market share. Sales growth slows.
Decline or Renewal: Revenue drops– requiring innovation (renewal) or risking failure (decline). Revenue falls due to market saturation or obsolescence, requiring either a pivot (renewal) or leading to closure (decline.)
This cycle is similar to the business life cycle and applies to individual products or services.
Development: Research and design (no revenue).
Introduction: Launching the product to the market.
Growth: Increasing popularity and sales.
Maturity: Peak sales and high competition.
Decline: Sales fall as the product becomes obsolete.
3. The Cash Conversion Cycle (CCC)
The CCC measures the total time (in days) when your cash is tied up in operations. It is a measure of operational efficiency. This cycle consists of its own cycles: purchasing, receiving, storing, selling, and collecting cash.
(The ultimate goal is to shorten this cycle in order to improve cash flow and increase liquidity.)
Other cycles within cycle #3:
Inventory Cycle (Kitchin Cycle): a short-term economic business cycle lasting approximately 3 to 4 years (roughly 40 months), driven by fluctuations in inventory investment and production adjustments.
Fixed Investment Cycle (Juglar Cycle): A 7–11 year cycle associated with business investment in machinery, equipment, and capacity expansion.
4. The Sales Cycle
This represents the recurring process of acquiring new customers and increasing revenue from existing ones. Cycles within the sales cycle are: Prospecting -> Initial Contact -> Identifying Needs -> Presenting Offer -> Overcoming Objections -> Closing Sale -> Nurturing Relationship.
5. The Procurement/Purchasing Cycle
The recurring process of acquiring products or services necessary to run the business follows these steps: Identifying need -> Sourcing options -> Negotiating terms -> Creating purchase order -> Receiving goods -> Payment.
6. Other Specific Cycles:
Conclusion:
The purpose of this blog was to help you identify trouble areas in some of the cycles in your business with the assurance that help is at hand:
If you are a manufacturer:
Automate tasks such as work orders, purchasing, sales orders, consolidate multiple sales channels and logistics.
If you are a wholesaler:
Automate tasks such as inventory management, order processing, purchasing, and customer relationship management.
For distributors:
Streamline order processing workflows, consolidate multiple sales channels, managing third-party logistics.
Online retailers:
Automate tasks such as receipt collection, data entry, financial reporting and communication with clients.
Regulated industries:
Automate compliance procedures, streamline processes, improve traceability with real-time reporting at your fingertips.
(This was part one of a 4 part series on: The Cycles Present in Any Business.)
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