Business Lifecycle

Managing through the business lifecycle: Maturity

Keep your edge as an established company.

Published: June 02, 2009
Updated: February 14, 2017

Your business has prospered over the years, and you've established a solid position in your chosen market. Even if you don’t have big plans for change, continue to build on your strengths so you don't lose customers to the competition.

Take stock of your most valuable assets, and then take steps to protect them:

  • Your customers. Continue to meet their evolving needs, and increase your revenues as well.

  • Your people. Attract, retain, and motivate the best talent with a strong employee benefits package.

  • Profitability. Take a fresh look at your financial indicators to identify areas where you can boost performance. 

  • Your business. Protect what you've built with a long-term plan for retirement and succession.

Start planning for your future

Once your business has established long-term stability, it's a good time to think about your own future as well.

  • Establish an estate plan. A comprehensive estate plan helps to optimize your tax situation and pass on your estate in the most cost-effective way.

  • Find ways to fund your retirement. To maintain your lifestyle, you'll need about 80% of your current annual income each year in retirement, according to a commonly-used rule of thumb.*

Is your insurance coverage keeping up with your success? Some businesses have outdated coverage and are at significant risk of being underinsured. Review the following with your agent at least yearly:

  • General liability coverage

  • Coverage per occurrence of claims

  • Professional liability coverage, if applicable

  • Protection for a loss of income due to disruption

  • Workers' compensation coverage

Measure, analyze, adjust

Monitoring financial indicators — such as cash flow metrics — can help identify ways to improve performance. "Regularly monitor your profit margins throughout the quarter so you'll have time to adjust your pricing and costs along the way to maximize sales," says Jack Alexander, CEO of Jack Alexander & Associates LLC, Calabash, N.C., a financial consulting and training firm. Consider the following strategies to improve financials in this economy:

  • Watch your cash "burn rate" closely. If too much cash is flowing out, ask yourself, "Do we really need all the services and equipment we have now?"

  • Negotiate. Improve cash flow by getting better terms from vendors and suppliers especially if you've done business together for a long time.

Maturity FAQs

Q: What are some ways I can reduce operating costs for my business?

A: Real estate can be a key tool for controlling your costs. Owning your space can make your expenses more predictable, and may save you money in the long run. If you rent, you may be able to reduce your expenses by renegotiating your lease and exploring virtual office space.

Q: What is the most important financial indicator I should be monitoring?

A: Net operating margin, also known as net profit margin, is the best measure of a company's performance. This is simply net profit divided by sales. The ratio tells how well a company converts revenue into actual profit — how many cents you get from every dollar of sales. Depending on the size of the business and the industry you're in, a healthy profit margin can be anywhere from just a few percent up to 25% or more.

Action steps

  • Upgrade your benefits offerings to keep the best people.

  • Monitor your financial indicators to improve efficiency.

  • Review your insurance, payroll processing, and merchant services to make sure your coverage and tools have evolved with your business.


Discover more Wells Fargo Resources

Learn how to read the pulse of your small business's financial metrics to make sure you're in good shape.

Learn about different retirement plans.

Find tips on how to effectively reconnect with existing customers.

*Source: Wells Fargo Advisors, 2014