GrowthConnection LLC header image
Compelling Business Plans That Work

The True Cost of Delays

The true cost of delays—cost of delaying the introduction of a new product or business is much higher than most people imagine.  Here is an insight that is true for many situations.

A typical product lifecycle looks like an inverted bathtub with launch, growth, mature sales, and obsolescence phases.  It is easy to illustrate any kind of launch delay, but note that this shortens the mature sales by this same amount of time.

The true cost of delays

Since the time of obsolescence is not controllable (usually determined by the market), the true cost of a delay is equal to the level of mature sales for that same period of time.

For products, and many services, measure the cost of delay as lost months of mature sales.

The true cost of delays will be the loss of mature sales.

This highlights the necessity of speed-to-market and the true cost of launch delays. Specifically, a three month delay translates to losing three months of mature sales. This is because a company can control the introduction of a product or service, but rarely has control over its obsolescence. This is a great wake up call, and also a great way to show the value of hiring help — like GrowthConnection LLC.

This lifecycle is true for service companies as well.  The fad for low-carb diets (the Atkins craze) recently hurt profits at the US doughnut maker Krispy Kreme, triggering a slide in its share price.  Readers in the Seattle area know that Larry’s Market is an upscale grocery icon now filing Chapter 11 bankruptcy protection due to competitive pressures.  There is great value in getting to market without delays.