In this third article in our series on the four stages of the business cycle we look at the top things to focus on when your business is in the maturity phase.
If you have successfully navigated a business through the start-up and growth phases you should take a moment to congratulate yourself and your team.
This doesn’t mean you can now rest on your laurels. You can’t just set and forget a business in the maturity phase of the business cycle. Regularly reviewing your business performance and environment and looking ahead is critical to ensure your business remains relevant and successful.
Mature businesses must stay relevant
An issue for a mature business is that people can see it as staid and not up with the times. It is critical that you remain flexible and adaptable and not fearful of change. Never lose sight of your customers and meeting their changing needs.
If you don’t continue to innovate, your business is ripe to be a victim of disruption. The taxi industry is a classic example.
One area we are encouraging our clients to focus is artificial intelligence (AI). Does it pose a risk to your business by supporting lower cost competitors to enter your market? How can you use AI and business automation to save time or costs or to generate new products or services?
Regular reviews are more important than ever for mature businesses
In the mature phase of your business, you can have more time to review your business performance data. Your data is often more stable and useful than in earlier stages of your business. Now is the time to use the power of live data.
Industry and executive benchmarking also comes into its own in this phase. You may think you are performing well but how are you doing compared to your competitors? This data will help you to refine budgets, target efficiencies, review supplier arrangements, and understand other costs.
When a business is larger in size and established, there can be benefits in contracting out support services. Tasks such as payroll, book keeping and stock control, can take time and divert you from working on the business, rather than in it.
Mature businesses need to look ahead
Now you are in the maturity phase of the business cycle it is time to review your business goals. Does your current structure support those new goals?
Your focus may shift from growing your business to selling or passing the business on to the next generation. Whichever path you are taking succession planning is key. You need to decide if your business has the right skills for this phase of the cycle. You may need to recruit new staff and take additional steps to retain key staff.
If you want to continue to grow your business you may need to look at a merger or acquisition which often require years of planning. Conversely, mature businesses can be attractive to other businesses. Know in advance how you would respond in the event of a takeover offer.
Finally, if you are the business owner and founder you must look ahead to providing for your retirement. Often in the start-up and growth phases of a business there is no time or cash to devote to personal wealth building or superannuation. Particularly if you are passing the business on to family, you need to take steps to ensure you have wealth for retirement that is independent of the business.
The right advice when your business is in the maturity stage
Pitcher Partners Newcastle and Hunter’s business advisors, accountants and wealth managers have extensive experience in successfully guiding owners of mature businesses through the maturity phase of the business cycle.
Whether you are a sole trader, partnership or company, we have dealt with almost every scenario a business can face in this cycle. We know the data you need and can supply management reporting as well as industry and executive benchmarking data to support good decision making. We also know the questions to ask you, including the difficult ones about structure, goals and succession planning.
Unlike many other firms, we can integrate our business strategy advice and services with business and personal accounting and taxation services and private wealth management services. Best of all, we are proactive, easy to talk to and customise our advice.
Got a question about managing a mature business?
We love questions. If you want to know more about Pitcher Partners Newcastle and Hunter’s business advisory services, please contact us.
Michael Minter is the Managing Partner at Pitcher Partners Newcastle and Hunter. Michael brings a deep knowledge of and experience with taxation issues, effective structuring, superannuation, and business improvement to help clients achieve outcomes while reducing risks. He is relatable and enjoys working alongside people to help them achieve their business and financial goals.
