In almost all areas of our lives, our activities follow along a cycle known as the Sigmoid Curve. Imagine a letter S lying on its side. Every new activity begins at the high point on the left, then moves forward into a decline (the learning phase) before rising up through the growth phase, leveling off and declining again.
The Sigmoid Curve
The Sigmoid Curve can be applied to anything from business activities to personal relationships to the rise and fall of empires. Being able to identify where you are at on the Sigmoid Curve at any point in time is helpful in growing your business and achieving success.
The Sigmoid Curve can be divided into three phases:
- Learning Phase
- Growth Phase
- Decline Phase
During the Learning Phase, you will be very busy, meeting challenges and obstacles, learning and experimenting with new things to achieve results. Many businesses never make it out of this first phase because they either run out of money or they lose steam to carry on and push forward. This is why there are so many startups that fail.
In the Growth Phase, you are flying high with your early success, full of energy and verve to keep going further. This is the most exciting time for small business owners and their team. Mistakes are stepping stones for learning and growing stronger.
The Decline Phase is when the early excitement starts to fizzle out. There are fewer products being sold, and fewer new clients seeking your services. Profits will decrease and morale will begin to wane among the team.
As an entrepreneur, it is important to always be watchful of where your business is on the Sigmoid Curve. In the first phase, you need to be persistent, be courageous, and cling to your vision while staying flexible enough to make the changes needed to help bring it to life.
Enjoy every moment of the second phase but always keep an eye on the economy and the marketplace. Do not let yourself and your team become complacent. Be ready to make changes in order to stay competitive. Don’t be afraid to reinvent yourself as needed. This is the time to build up your cash reserve to help in case of need.
If you fail to be vigilant and take action in the second phase, you will soon find yourself sliding down into the third phase. With proper planning and strategy, you can move from the Decline Phase and swing it back up into a new Phase One. You have a chance to reinvent and reshape as needed to bring life back into your business.
Know where you are on the Sigmoid Curve and you will be ready to take any necessary steps to keep your business growing and succeeding.