Navigating Business Lifecycle Differences: From Startups To Established Companies

In the dynamic world of business, companies go through various stages of development, each with its unique characteristics and challenges. One way to differentiate businesses is by their position on the lifecycle “S” curve. The startup stage marks the beginning of the curve, while an established firm can be found somewhere along the rest of the curve, either growing or declining. Successful consumer-centric planning for these lifecycle stages requires different approaches and considerations. Lets explore the differences between startup planning and established business periodic update planning, emphasizing the need for a clear point of reference and the importance of effective planning at each phase.

A startup business enters the market with no sales history, operational track record, or prior knowledge of how the market will respond to its offering. It lacks a point of reference from which to judge the actions of its owners and faces a significant challenge in determining the viability of their business model. To overcome this hurdle, at its inception, the startup’s key task is to establish a baseline point through a planning process called “vetting.” Vetting involves gathering knowledge and refining the business model concept by analyzing industry dynamics, market trends, pricing strategies, and competitors’ fit. This process allows startups to define success criteria and establish SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals for operations, marketing, and key performance indicators (KPIs). Vetting helps mitigate risks and provides a solid foundation for decision-making, enabling startups to justify taking calculated risks necessary for launching and growing the business.

Contrasting with startups, established businesses have a point of reference or baseline to evaluate their success. This baseline is derived from previous periods’ SMART goals and KPI results, as well as any completed business inflection point testing. At this stage, planning focuses on evolving the business throughout its lifecycle. The periodic update planning process involves assessing the current position of the business, identifying market trends, and aligning strategies with the evolving industry landscape. It allows businesses to leverage historical data, draw insights from past performance, and adapt their approaches accordingly. The emphasis shifts from creating a reference point to leveraging the existing reference point to drive growth and sustainability.

Beyond the baseline reference point, there are additional distinctions between startups and established businesses. A common mistake made by many startups is overly focusing on the technology, software, product, or design, neglecting the core essence of the business … how it acquires and serves its customers. By solely fixating on these aspects, startups often fail to develop a comprehensive understanding of their business model. However, as businesses progress along the lifecycle curve, they tend to get absorbed in the operational details, losing sight of the bigger picture. This tunnel vision prevents them from scaling effectively, achieving optimal profits, identifying opportunities, fostering innovation, and standing out from the competition. To overcome these challenges, businesses must strike a balance between focusing on operational efficiency and maintaining a clear vision of their overall business objectives. Startups need to define how they will acquire and serve customers to ensure sustainable revenue streams. For established businesses, it is essential to periodically reassess their vision and align it with the changing market landscape.

Due to the variances in the point of reference along the lifecycle curve and the shift in focus caused by tunnel vision, business planning can be divided into two distinct stages: startup planning and established business periodic update planning. Startup planning involves the creation of a reference point through the vetting process, while established business periodic update planning builds upon an existing reference point by leveraging historical data and market insights.

In both cases, the final plan document encapsulates the critical thinking and decision-making based on the accumulated research and knowledge up to that point. It serves as a roadmap, guiding businesses through their respective stages and helping them navigate the unique challenges they face.

Recognizing the differences between startup planning and established business periodic update planning is crucial for long-term success. Startups must create a reference point through vetting to establish SMART goals and KPIs, providing a solid foundation for their initial operations. On the other hand, established businesses leverage historical data and market insights to adapt and thrive in an evolving business landscape. By avoiding the pitfalls of tunnel vision and understanding the importance of effective planning at each business model phase, companies can overcome challenges, seize opportunities, and achieve sustainable growth. Ultimately, a well-informed and adaptable approach to customer centric business planning is essential at every stage of the lifecycle “S” curve.

If you are planning to start a business or are thinking about scaling an existing one, be sure to read the ebook “Customer Centric Business Planning: A Guide to Optimizing Your Business for Maximum Success”. It is an essential book for business owners, managers, and entrepreneurs looking to leverage real-time insight to start and improve their business operations. Learn how proper customer centric business planning can assess risk and opportunity, and create an actionable roadmap for success.

Copyright ©John Trenary 2023. All rights reserved.

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