A successful business goes through many stages, each requiring a particular focus with important decisions that lay the foundation for the future. Are you sure that you are making the best business and financial decisions today? Do you know what you should be worrying about now and what can wait until later?
The trouble is there are so many things you can be worried about and so many people telling what they think you should be looking at. I created this list to give you an idea of what things you should really be looking at, at any given stage of your business. I have included some metrics about years in business and employee count but these should be used as a guideline only. It is entirely possible to be in a growth stage year one or have 30 employees when you start up.
“The Start-Up Stage” (1 to 5 Employees, 0 to 3 years in business)
The start-up stage is the first stage of any new business. Most likely, you are struggling with the day-to-day responsibilities of the business, the things you did not have to worry about when you were working for someone else. You are overwhelmed with the complexity of running your own business. At this stage, you need to focus on business basics such as:
- Developing business plans
- Required financing
- Basic business concepts
- Accounting and management systems
Small business owners, especially at this stage, are inundated with ideas, options, choices, and plans. It is important to stay focused on implementing the basic principles of a successful business. This foundation will provide a solid platform for you to grow your business on later.
“The Growth Stage” (5 to 15 Employees, 1 to 6 years in business)
In the growth stage, you face other, distinctly different, problems. You have proven your business concept and are likely making some money. You know how to run the day-to-day operations of your business. But, you are struggling to grow the business by adding more employees and services. During this stage, your focus needs to shift to things like:
- Business entities
- Hiring and training
- Tax advantages
Growth Stage businesses are where most small business stop growing. Their owners do not have the ability to create a strategic plan to help them grow beyond themselves. The focus needs to be on long-term planning and preparing for the inevitable bumps in the road.
“The Mature Stage” (12 to 25 Employees, 5 to 15 years in business)
Mature businesses face problems and issues that are even more complex. You have created a successful business, you have great staff, you have good profitability, and great customers. But how do you keep this complex operation running, without you needing to be involved every second of every day? At this point, you need to transition away from the small business mentality and start thinking like a business professional. You need to focus on:
- Goal setting
- Retirement plans
- Cash flow management
- Organizational structure
Mature businesses have a unique challenge. How to grow is no longer your primary issue. You are grappling with the issues that are created by a growing company. How do you manage the growth? How do you keep it sustainable? How much growth is enough? These are the tough questions that are best answered with professional guidance as a sounding board.
“The Exit Stage” (Any Number of Employees, 10 to 30 years in business)
A business in its Exit Stage is the climax of every business owner’s life. You built this business; you achieved your dream. But how do you take that business and turn it into the retirement that you have worked so hard for? You need to focus on the big ideas like:
- Succession planning
- Retirement income
- Exit strategies
- Estate and income tax issues
Making decisions at the Exit Stage have lifelong consequences. By now, you know the impact that one bad decision can have on the business. You understand your needs for retirement, and know that you will probably never grow a business to this stage again in your lifetime. Most business owners procrastinate their planning due to “paralysis by analysis”. They are emotionally attached to their business; they are unable to face the tough choices involved in exiting. Getting professional help to give you an objective view is critical at this stage.
Owning a business is the single greatest way to accumulate personal wealth. The trouble is, most people enter the business arena because they want to do something they love – not because they are great at running a business. That’s what we’re for. At NCH Wealth Advisors, we have the experience to guide you and your business, no matter what stage it is in. Give us a call so we can lay out a roadmap to success for you!