If you’re into bodybuilding, or know someone who is, you’ll have invariably heard the phrases ‘bulking’ and ‘cutting’ before.
For those that don’t know, bulking is the phase bodybuilders go through when they are attempting to pile on more mass during ‘off-season’.
Cutting, on the other hand, is the process of dieting that bodybuilders go through to strip their body of excess fat and water so they look as ripped as possible on-stage.
By now, you may be thinking, this is a business blog – why are you talking about bodybuilding?
Well, strangely, there are very similar parallels between the two.
Cut away the intricacies, and strip them both back to basics – business and bodybuilding – and you ultimately have a situation where you are trying to build something. Be it your body, or your business.
And in building something, you inevitably face phases whereby you focus on growth, and also phases where you strip things back a little.
No business can continue to grow infinitely and uninterrupted, and no growth cycle is ever as smooth as it looks from the outside.
There are mistakes, strategic changes, recruitment drives, employment cuts, investment, and divestment – until the business reaches its optimal performance.
A businesses’ bulking cycle could be seen as the process of investment – through recruitment drives, property purchases, business infrastructure, more stock, and so on.
But, as with bodybuilding, you cannot go through a bulking cycle (regardless of how clean you eat or how hard you train) and not also gain some amount of fat and water retention. It is impossible.
In the case of a business, the ‘fat’ could be seen as overstaffing in certain areas, overstock on certain product lines that don’t sell that fast, excess/unused office or warehouse space, and so on.
These are the natural (and inevitable) side-effects of growth – it’s impossible to maintain perfection during a growth cycle. You WILL gain some unwanted by-products from the growth process – it’s precisely why bodybuilders go through the bulking and cutting cycle. If it was possible to maintain competition physique whilst gaining more mass in a bulking cycle, then these cycles wouldn’t exist – bodybuilders would just constantly ‘bulk’.
So, then comes the ‘cut’.
When the dust has settled during a growth phase, and the business can be analysed in the areas of profitability and efficiency, the business leaders will then go through a phase of stripping any unnecessary ‘fat’ from within the business.
They’ll cut staff, refine their stock holding and discount/discontinue slow-moving lines, they’ll re-organise processes to gain more efficiency, and they may even dispose of unwanted or unprofitable assets within the business.
Until, down the line, the business has retained much of the revenue it gained through the growth cycle, and has now stripped down to show a healthy profit on that turnover following the ‘cut’.
Just like a bodybuilder, following a cut, would look to maintain most of the lean muscle mass they gained during a bulking cycle, but have stripped away any excess fat and water during the cut – achieving an optimal physique for competition.
All businesses go through these cycles over time in order to ultimately achieve profitable growth – and it takes a careful balance and strategic management to perform successfully.
Focus too much on the growth phase of your business and you’ll have a high-revenue organisation that struggles to turn a profit (or even worse, makes a loss) or that turns a profit but struggles with cash.
Alternatively, focus too much on the profit aspect of your business (and be fearful of reinvesting for future growth), and you’ll see little to no growth in your business over time, and your profit will stagnate.
As a business owner/manager, you have to go through these cycles in order to progress, but you also have to be mindful of the downside associated with not achieving an optimal balance between the two.
What stage are you currently in with your business? Bulk or Cut? Please share your business growth story in the comments below.