What is product life cycle?

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What is product life cycle?

What is product life cycle?

We always hear about the product life cycle in manufacturing and marketing. But What is the product life cycle?

The product life cycle is the duration of the product from an idea to the end of the product’s life. Which include designing cycle, manufacturing cycle, and sale cycle. Since there is a cycle, then there is a time limit for the product you are planning to manufacture. The product’s life cycle is 100% and if you divide the time percentage between 3 cycles, it will be 33.33% for each cycle.

So, if you want to extend your sales cycle, what do you need to do? You need to shorten your manufacturing cycle or designing cycle. Let’s take this example, you have an idea for a product and your product’s life cycle is 12 months. So each cycle is 4 months. Let's say you shorten your design cycle from 4 months to 2 months. Then you add 2 months from your designing cycle to your sale cycle which will be 6 months

Now you have more time to sell your product.! But what if you can shorten your manufacturing cycle to 2 months? Now you’ll  have:

Design cycle 2 months

Manufacturing cycle 2 months

Sale cycle 8 months

The sale cycle has increased to almost 66.6% which means you have 66.6% of your product lifetime on sale cycle.

I am sure now you understand the benefits of a shorter design and manufacturing cycle will benefit your company.

Keep in mind that the opposite is true. Which means if your designing cycle and manufacturing cycle take more than 4 months for product cycle then you will end up with less sale time for your product.

Of course, products are different from each other but this is an example of an easy and simple product.

In the next podcast ,I will go over specific benefits of the product short cycle.

See you next podcast.

#podcast #manufacturing #cycle #marketing #product #consultation

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What are the differences between private and public company?

Private and Public Companies

Most of the companies in the US are privately owned and a few companies are public. Private and public companies have almost the same structures, but there are some differences between them.

Private Companies

• Directors are usually shareholders who control all of the shares.
• In the US, private companies are not required to disclose any report outside the company.
• Shareholders and owners are often involved in management decisions.
• It is hard to attract investors when private companies need to raise capital because less financial details are available for investors.
• Company value fluctuates because it is difficult to assess the company value with fewer financial reports available.
• The number of shareholders is limited to fewer than 2000.

Public Companies

• Directors are not necessarily shareholders.
• Public companies have a legal obligation to share financial reports to the public.
• Shareholders are often not involved in management decisions, which sometimes leads to conflict between shareholders and management.
• Raising capital is easy for a public company in which the company can sell shares and bonds.
• The value of the company is easier to assess from the trading price and shares and financial reports.
• There can be an unlimited number of shareholders.

Key Terms

• Private Company: A company who trades its shares for public at a stock market
• Public Company: A company who is held under private ownership and shareholders
• IPO (Initial Public Offering): When a company starts the process to offer shares to the public.

Q&A

What are the steps for a private company to become a public company?

Here are the steps for private company to change to public company:

• Choose board members
• Inform staff
• Vote for conversion
• Register company
• Make public announcement

Why is a public company better than private?

Public companies have the benefits of the financial market by selling shares and bonds, unlike the private companies who have to attract investors to sell private shares.

Which private company is the world's largest employer?

According to Fortune Magazine, China National Petroleum Corp has 1,242,245 employees, but the government owns 50% or more.

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What is the corporation company and how many types?

Hello,

In this episode, we talk about corporation company and the benefits of each structure such as B Corp, C Corp, and S Corp.

Share and Subscribe.

Thank you for your support always. :)

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What is Sole proprietorship Company?

In this episode, I talked about Sole Proprietorship companies and what are the advantages and disadvantages of owning sole proprietorship company.

I also give an example of multinational companies who started as sole proprietorship and become an empire.

I know your time is very valuable. So, I focused to make it short and to the point.

If you have any question or have a feedback, please contact me. Let me know what do you think :))

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Sole proprietorship

Sole proprietorship is the simplest business structure that is formed by one person as sole proprietor. Business can start with sole proprietorship and move to a company status in the future. Sole proprietorship can be formed by more than one person as a partnership. Which means that all owners are liable for the company debt and can’t be protected. For partnership income tax, each person can tax his or her own tax depending one the owning persentage.

Advantage of Sole Proprietorship:

• You are in control of 100% of the business.
• Simple to register as a sole proprietorship company which you can own by one owner.
• Less expensive and little capital needed to form the company.
• Trade under your name or company name.
• Use your SSN when you file tax and you are not required to have EIN
• Easy  to transfer the business ownership to another person.
• You can put your business on hold at any time.

Disadvantage of Sole Proprietorship:

• Unlimited liability for business debt or if you get sued. Because there is no separation between the owner and business.
• It is challenging to raise money when you need it and bankers won’t lend money easily to solepropritorship because of the risk that when business fails, no one will pay the debt.
• It is hard to sell the business as a whole but you can sell the asset separately. Because not a lot of buyers are interested in buying your company and keeping it running.

Here are some example of company started as sole proprietorship and partnership to multinational companies:

Richard Branson started as a sole proprietorship that expand into Virgin empire

Steve Jobs and Steve Wonzinak: partnership that created Apple company.

John Willard Marriott, Sr started A&W as a sole proprietorship

Key Terms:

• Sole Proprietorship: is an individual who is the only owner of the business.
• Partnership: two or more individuals who own a business
• EIN: Employer Identification Number and it is nine digit number issued by IRS for tax purpose
• Entity: an organization that is formed by an individual or individuals to conduct business.

Q&A:

What is Sole proprietorship?

It is an individual who is the only owner of the business.

Can you hire an employee if you are a sole proprietorship company?

Yes, you can hire employees if you are sole proprietorship

Do you have to have a physical location?

You do not need a physical location such as a store. You can use your own home to do that.

Hope this can help. :)

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