Feb 14, 2023
OVERVIEW:
Jason A. Duprat, MBA, CRNA, Healthcare Practitioner, and Host of the Healthcare Boss Academy podcast, talks about the Product Life Cycle and what it means for your business. In this episode, we'll learn how Cash Generation ties in with Cash Usage as Jason elaborates on the Growth Share Matrix and its four quadrants. Tune into this episode to learn more about leveraging your business income!
3 KEY POINTS:
- Cash Cows are the golden goose that funds your businesses.
- What you earn from Cash Cows is invested into “Question Marks.”
- Question Marks either become “Stars” or “Dogs.”
EPISODE HIGHLIGHTS:
- Jason uses the BCG matrix, a diagram that helps to put things into perspective what big companies go through when they have multiple products and divisions and they're trying to work towards the following product or service line.
- The BCG Matrix is also referred to as the Growth Share Matrix.
- Stay tuned on YouTube for the Video version of the episode showcasing the diagram.
- The matrix is a Four-Quadrant Graph, having X and Y axes. The X-axis represents Cash Generation. The Y-axis represents Cash Usage.
- If you want to keep growing, you have to leverage the revenue from your Cash Cow to start a new product or service line.
- The problem with cash cows is that the product can die down. The delivery can get stale, and new competition can come in."
- You can't just sit on one Cash Cow and expect it to last forever. What most businesses do is they'll invest the money earned from that Cash Cow.
- In the top-right corner, with Low Cash Generation & High Cash Usage, is the "Question Mark." You invest in this product or service to build it up. Everything starts as a question mark at some point.
- From a Question mark, it can quickly move over to a Star (top-left, High Cash Generation & High Cash Usage) or a dog (bottom-right, Low Cash Generation & Low Cash Usage).
- If you're very experienced, most of your question marks will turn into Stars, which is high in Cash Generation but also needs a good amount of Cash to operate continuously.
- Throughout the episode, Jason discusses different services they're working on as an example of how to leverage the BCG Matrix.
- While this isn't a hard rule, Jason suggests not putting all your time and investment into "Dogs" because that's not where the business growth opportunities are.
- Solving your existing customers' problems is much better for ROI and increases your Customer Lifetime Value (CLV).
TWEETABLE QUOTES:
"The Cash Cow is what your business leverages to produce the income necessary to develop, add, create, or build additional products or services." – Jason A. Duprat
"Start with just one or two products or services. If you get really good at those, at some point, you're going to develop a Cash Cow." – Jason A. Duprat
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RESOURCES:
- Sign up for one of our free business start-up Masterclasses by heading over to https://healthcareboss.org/masterclass/
- Have a healthcare business question? Text me at 386-284-4955, or email me at podcast@healthcareboss.org and I’ll add you to my contacts. Occasionally, I’ll share important announcements and answer your questions as well.
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