Business Optimization: Know When and Why To Coast, Grow, and Pause
🕐 Read Time 4 Minutes
You’ve probably heard the country song, “The Gambler,” and its well-known lyrics:
“You've got to know when to hold 'em
Know when to fold 'em
Know when to walk away
And know when to run…”
Sure, the song is about the game of poker, but it’s also a metaphor for how to adapt to the changing seasons of life (or ‘hands’ you’re dealt) — different phases in your life come and go, and understanding how to react in each phase can help you continue to forge ahead.
Just like life, businesses also go through phases that are influenced by various internal and external factors. Understanding these phases can be key to the sustained success and longevity of your business. Whether your business is in a coasting phase, growth phase, or pause phase, each phase serves a purpose in moving your business forward.
By recognizing and managing these phases, and moving intentionally through them, you can make the most of each phase and help to grow and evolve a successful, thriving business.
Understand the Different Phases of Your Business
1. The Coasting Phase
Coasting in business is maintaining a steady pace, without pushing ahead toward significant growth, undertaking any major initiatives, or making significant changes in your operations. The coasting phase is all about stability and predictability: maintaining the status quo and avoiding unnecessary risks.
The coasting phase allows you as a business owner to focus on refining your processes, improving your efficiency, and maintaining a steady revenue stream. It’s a time to consolidate your gains, and make sure your business foundation is solid.
Coasting can benefit your business during times of market uncertainty or any internal transition; it provides a buffer zone where your business can operate without the pressure of growing or meeting aggressive targets.
The coasting phase is especially useful after a period of rapid expansion or a challenging economy; it’s a strategic period to assess the current state of your business and prepare for opportunities ahead. It also can prevent burnout among your employees or leadership, since it reduces the pressure of constantly innovating and growing.
During this phase, your business should prioritize preserving resources and optimizing your budget: it’s a great time to review your finances, reduce unnecessary expenses, and build a solid financial cushion for future growth or any unexpected challenges that may come your way.
2. The Growing Phase
The growing phase is exactly what it sounds like: the phase where your business is actively expanding its operations, increasing revenue, and capturing more market share. Having an effective business growth strategy in this phase is key to your business’s long-term success and market position
In the growing phase, you may be launching new products or services by diversifying your offerings or scaling your operations during the growing phase. You may also be strategically planning and increasing your marketing efforts to boost your brand awareness to attract new customers.
Pursue growth for your business when market conditions are favorable and your business has a solid foundation to build upon. The growing phase is ideal for capitalizing on new opportunities, increasing your profitability, and strengthening your market presence.
During this phase, make sure you have the resources, capacity, and strategic direction to support expansion and help you drive growth. Growing your business often requires significant investment: you may need additional capital, whether through financing or reinvesting profits. Managing your cash flow is crucial to ensure your business can meet its financial obligations while investing in growth.
3. The Pausing Phase
Taking a pause in your business is a time when you can take a step away to reflect and regroup — it’s a deliberate break in your business activities or operations to re-evaluate and re-strategize.
The pausing phase, while it sounds counterintuitive to doing business (why would you want to pause your business?), provides an opportunity to realign your business goals and ensure it’s on the right path. It’s not about stagnation, but about strategic reassessment and preparation for the future.
Pausing your business is crucial when you need to address internal challenges, such as organizational issues or declining performance. It’s also beneficial during times of external challenges, such as persistent economic downturns. Pausing allows you to make any necessary adjustments without the pressure of having to maintain ongoing operations.
The pausing phase is a time for careful financial planning, and making sure your business is financially healthy and ready for the next phase. You can focus on reducing your spending, cutting non-essential costs, and reallocating resources to areas that need improvement during this phase. You can then be primed and ready to go when you’re ready to resume your business.
Transitioning Between Phases as Part of Your Business Strategy
Purposefully transitioning between coasting, growing, and pausing your business allows your business to respond proactively to internal and external changes. There is value in moving intentionally between phases: it helps ensure your business remains agile, adaptable, and capable of maximizing opportunities while minimizing risks.
How can you recognize when a transition is needed in your business? Regularly assess your business’s performance, market conditions, and internal capabilities. Some important indicators may be changes in revenue, new market opportunities, or operational challenges.
Planning and preparing for phase transitions involves setting clear goals, developing action plans, and making sure you have adequate resources in place. Each phase is vital to the growth of your business, and strategic transitions can help your business maintain momentum and be successful in the long term.
Help Your Business Thrive in Any Phase
Every phase of your business has distinct financial needs, and managing your finances effectively helps you adapt to the specific requirements of each phase and navigate the transitions more smoothly.
During the coasting phase, focus on cost efficiency and maintaining stable revenue. In the growing phase, manage your increased expenses and secure additional funding if necessary. During a pause in your business, conserve your resources and plan for future investments.
Successfully managing your business’s finances helps ensure your business can thrive in any condition, in any phase. Sound financial management provides the flexibility to invest in growth opportunities, weather any economic or market downturns, and strategically pause when needed.
At Financial Fitness Coaching, we can help you develop financial strategies so that you can move intentionally through the phases of your business with less stress and more purpose.
We empower you by helping you create a financial roadmap where managing your business finances becomes second nature, and you can focus instead on driving success and achieving your goals. Download a free copy of our CFO Checklist to get a jumpstart on conquering your business’s finances today.