Do you know what stage of the entrepreneurial life cycle you and your business are currently in? Most entrepreneurs have no idea, but it’s an essential business detail to consider. If you know what stage you’re at, you can use the information to determine when to push for more growth, when to keep your finances tight, or when it’s time to sell or exit. To help you get the most out of your business, read on to find out where you and your business sit in the entrepreneurial life cycle.
Stage One: Growth
During the growth cycle, you’ll be looking at ways to expand your operations and move your business forward. In this stage, your company is likely not very profitable just yet or is trying to multiply. This means you’ll be attempting to get new contracts, meet new clients, and build more capital. In this cycle, you’ll also have to spend significant time marketing and promoting yourself through multiple channels, taking on more high-risk, high-reward projects, and maintaining the confidence needed to push your business to the next level.
To stay afloat, you’ll need to find ways to invest in your business to accommodate the growth, whether it be through seeking additional loans or hiring new staff members. These mechanisms will help ensure your company is both stable and profitable.
Stage Two: Stability
During this stage, your business is becoming more established and is generating stable returns, but you’ll need to stay focused in order to keep your finances tight and avoid falling into debt. Luckily, there shouldn’t be a shortage of financial options if you need them but it’s wise to make sure that you don’t push further than expected. Stay realistic about your levels of success during each phase; if you attempt to overextend yourself, you’re likely to make a mistake.
It’s crucial at this stage more than ever to have a professional on hand who you can seek advice from and who will put in place safety nets to weather any shortfalls. Remember — it only takes one big speed bump to push your business off the “stability rails.”
Stage Three: Fine Tuning
At some point in your entrepreneurial cycle, you’re bound to hit a roadblock that puts your business at risk. When this happens, it can feel as if everything is crashing down around you. That’s why it’s incredibly important to stay level-headed, stomach the risk, and do some fine tuning to get your business back on track. In order to do so, you may have to surrender some of your equity or take on some options that carry a higher level of risk than you are used to.
Stage Four: Exiting
Eventually, every entrepreneur will reach a point when they’re ready to retire, sell the business, or walk away. That’s where succession planning comes into play. A good succession plan can make sure that the transfer or liquidation of your business goes smoothly, that your legacy is protected, and that your family and stakeholders receive financial security.
No matter where you are in your entrepreneurial life cycle, it’s important to plan for your future by making sure you have an exit strategy in place. When you’re ready to get serious about your financial future, reach out to us at The Beacon Group of Assante Financial Management Ltd. We will leave no stone unturned to create the best tax, compensation, and succession plan that is tailored for you, your business, and your family.