March 30, 2016

Jumping the Turnstile to the Next Phase of Business

A turnstile is a device that controls the passage of individuals from one area to another. It can record the number of persons passing through and it can also limit passage until payment is received. Imagine a turnstile between each phase of business: start-up phase, growth phase, expansion phase, and mature phase. What if you could jump the turnstile without paying for passage? It’s not breaking the rules if you own the turnstile.

Turnstile is really just a metaphor for threshold. In order to move through the different phases of business, you have to exceed the conditions of the previous phase for the new phase to occur. Your threshold is the point in which a new phase of business begins. Let’s look at the conditions of each phase of business.

Start-Up Phase (Survival Phase)

The main goal here is survival—obtaining customers, delivering the product or service, and meeting the cash demands.

In this phase, your business has yet to stabilize either production or product quality. You, the owner, do everything from performing all the important tasks to directly supervising your employees, if you have any. Operations is at its least efficient state and systems and formal planning are minimal to nonexistent.

If you’re able to meet the main goal, you have a viable company. The unfortunate case here is that a good chunk of small business cannot. Instead, they shut their doors or sell the business for its asset value. If you’re part of the approximately 75% that are able to remain in business, then you enter the growth phase.

Growth Phase

The main goal here is growth—generating enough cash flow to meet overhead, finance growth, and earn an economic return on assets and labor.

In this phase, you have enough customers and are able to satisfy them well enough to retain them. Your business may have a manager supervising your limited number of employees; however, you’re still pulling the strings with well-defined orders. Systems and formal planning are minimal and you’re still synonymous with the business.

If you’re able to meet the main goal, you have grown in size and profitability. Unfortunately, many companies remain in this stage earning marginal returns. These companies eventually go out of business, selling at a slight loss, or failing completely. If you’re part of the approximately 50% that are able to remain in business, then you enter the expansion phase.

Expansion Phase

The main goal here is expansion—taking the cash and the established borrowing power of the company and risking it all in financing growth.

In this phase, your company has grown large enough to require functional managers to take over certain duties performed by you in order to meet the demands of the growing business. Basic financial, marketing, and production systems are in place and are becoming more refined and extensive. Both operational and strategic planning are being done with the inclusion of particular managers. Cash is abundant, but must still be well-managed during prosperous periods in order to withstand the inevitable tough times. At this point, you’re able to focus on activities outside the company to an extent due to the presence of other managers, delegation, and cash flow.

If growth occurs too rapidly with insufficient cash flow or you fail to efficiently delegate enough to make the company work, you may drop back to the previous phase or fail. If you conquer the challenges of a growing company, both financially and managerially, then you enter the mature phase.

Mature Phase

The main goal here is to remain a formidable force in the market—eliminate inefficiencies, professionalize the company, and maintain your entrepreneurial spirit.

In this phase, your company has the advantages of size, financial resources, and managerial experience. You have the employees, the experience, and the financial resources to engage in detailed operational and strategic planning. Systems are well-developed and extensive. Management is decentralized, divisionalized, adequately staffed, and experienced. At this point, you have become quite separate from the business, both financially and operationally, as you are less needed on the production line and managerially, and your business is profitable.

If you’re able to remain a formidable force in the market, you’ve maintained your entrepreneurial spirit. If not, you may enter a fifth stage per se called ossification, which is characterized by a lack of innovative decision-making and the avoidance of risks. At that point, a major change in the environment may be your Achilles’ heel.

Owning the Turnstile

If you own the turnstile, you control passage. Owning the turnstile is knowing where, when, and how to act upon your business data. When you have this information at your fingertips, you have the ability to control your company’s destiny and move your vision forward.

You can do this with detailed spreadsheets, or you can streamline things with a modern business intelligence tool like an automated dashboard. With an automated dashboard, you have your business analytics at your fingertips, giving you the power to drive production and be proactive versus reactive to the ebbs and flows of business.

Nothing will accelerate you faster through each phase than hiring the right people and empowering them with the right tools. When a team member understands their role and what to focus on, magic happens. With a growing organization, wouldn’t it be nice to be able to quickly identify whether or not your metrics are on target with colored performance levels you can customize? You’d know exactly where in your business needs your attention. What about receiving alerts to know who needs your help and when they need it without having to ask? You’d know when to act, providing the ability to identify slips in production trends before it affects your bottom line. How about receiving training recommendations linked to metric performance and having access to a library of resources to better your production, operations, management, and more? You’d know how to act upon your data, giving you the ability to not just measure performance, but improve performance. When you know when, where, and how to act upon your business data, you have the power to stabilize your KPIs and break through the barriers to the next phase of business.

BlueIQ is the automated dashboard with intelligence that provides the ability to know where, when, and how to act upon your business data. Unlike other dashboards out there, we're more than analytics. BlueIQ is about a positive work culture, a sense of purpose, a meaningful impact, fulfillment, and being able to see individual and team progress towards the company vision. We're different because we're building an automated dashboard designed to help you achieve your company vision. Coming soon is your ability to own the turnstile.

Owning the turnstile is having a secret weapon that allows you to see the interworking of your business, where flows need to be optimized and ebbs need to be course-corrected. You’ll be able to accelerate your progression and maximize your profitability, but perhaps more importantly, give your employees a sense of purpose, create a positive work culture weaved with the threads of accountability and productivity, and lead instead of react.

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