Harvest TimeHow to reap maximum benefits from a slow-growing product.
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It wasn't like most of the business plans Jack Fernerreviews. Instead of investing more money to boost sales of awell-established but slow-growing product line, it outlined a planto shrink investment, keep sales static and milk the market forprofits as long as inventory lasted.
"The idea was to collapse advertising costs and otherdiscretionary expenses, treat [the product line] as a cash cow andliquidate the investment to focus on a product line they thoughtwas more promising," explains Ferner, a management professorat Wake Forest University in Winston-Salem, North Carolina. Usingthis kind of strategy to harvest the profits of a business orproduct doesn't come naturally to most entrepreneurs. Butexperts say a harvest strategy that allows you to redeploy assetsto better opportunities is an important part of an entrepreneurialtoolkit.
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