At some point in the life cycle of a business there are life-changing events. These life-changing events can range from data center changes to accounting regulations to succession planning and all fall into one of seven key categories.
It is critical for your business to have a plan in place to navigate these changes - the better the systems and processes you have in place, the easier your leadership team down to your lowest level worker will acclimate to these substantial changes.
Let’s explore the seven key categories of life-changing events that can happen at your company - the following changes should be "signals" that you should review the systems you have in place to keep your business running efficiently and smoothly.
1. Equity events
An equity event at your business could be an initial public offering (IPO) or it could come in the form of bank leasing changes where you receive new and/or expanding lines of credit.
It could also be in the form of an infusion of an “external source of money” whether that be family ownership changes, new partner(s), an angel or venture capital investment or private equity investment.
Lastly, your business could experience a life-changing event in the form of exit strategy preparation.
2. GrowthGrowth comes in many forms and if you don’t have the necessary systems and processes in place at your business to keep up, the process can be painful for everyone involved.
Your business could experience organic growth, leading you to outpace your current internal systems or pursue new markets whether they be multiple domestic locations or international prospects.
Growth could be in the form of new revenue source(s) from new product line(s) to new revenue model(s) such as expanding into eCommerce or other channels.
You could also experience rapid growth through mergers, acquisitions and/or joint ventures that would require a significant plan to ensure your current processes and systems could handle the growth.
3. Strategic initiatives
There are many strategic initiatives in your company that will significantly shift the landscape of your business - these can be initiatives to increase employee productivity to specialized projects to market leader shifts.
Increasing employee productivity can be anything from adopting software that automates manual processes to virtualizing your workforce.
Or your business could be undergoing a specialized project, whether it be a phased transformation or commerce-related.
Your business also needs to be prepared for market leader shifts (i.e. Office 365 vs. Exchange).
A life-changing event at your business could come in the form of changes in the structure of your business, from adding new leadership members by bringing in outside advisers or exploring “two-tier” pursuits in the form of a divestiture or standardization of divisions/subsidiaries.
5. Government and/or industry regulations
Accounting regulations can significantly impact your business and can come in the form of revenue recognition standards, SOX or PCI compliance or even localization/multi-book requirements (i.e. IFRS, GAAP).
6. Business threats
Business threats come in all different shapes and sizes and have a lasting effect on the health of your company. Identifying those threats can help you be better prepared for a life-changing event at your company. You could experience a change of client buying preferences, security breaches or employee theft.
Over-reliance on key personnel could leave you unprepared if they unexpectedly leave the company. Being unprepared to respond to a competitor that has gained marketplace advantage could cause you to lose out on new business.
7. Cost-cutting and/or obsolescence
Obsolescence at your business can come in the form of version-locked software that forces you down an unrealistic, costly and complex upgrade path or weighing the benefits of replacing your system over going through such a complex and costly "upgrade".
You could make a change that results in lowering costs, like cash flow preference (subscription vs. capital appropriations outlay).
Other events that signal you need to review the systems you have in place at your business? Data center changes, expiring contracts, and/or significant hardware upgrades.
Preparation is the key to successfully navigating any life-changing event in your business. How can you prepare? Take our free modernization assessment and find out where your business stands today: