Stages of business: denial, anger, bargaining, depression, acceptance, discovering enlightened meaning.
Wait, we may have mixed that up with the stages of grief—although you may find many of these apply as well. Establishing success as an entrepreneur is a rollercoaster of emotions. On Tuesday evening, you’re ready to pop the champagne and revel in your success. By the end of the week, you’re ready to call it quits. Seriously, what a ride.
Whether you’re toying around with the idea of taking your artisanal lip balms to the next level, or you’ve got a team of magical elves working behind-the-scenes, establishing the various stages of business is crucial. Every phase has its obstacles, so you’ll need to determine what success looks like at each one. What’s important today may not be so important tomorrow. As an entrepreneur, we know you’ve got a lot on your plate. That’s why we’ve created an easy-to-follow roadmap for your business lifecycle. Remember, each business is unique, and so is your journey. This is a universal approach to conquering your business finances at different stages of growth.
Stage 1 Of Business: Planting The Seed
You’ve got ideas. You are a mover, a shaker, and you’re down to try anything twice (we see you Leos and Capricorns). You have a zillion-dollar idea, and you’re ready to take it to market. We are so proud of you. *round of applause* It takes some real grit to make your dreams come true, which includes developing a framework that’s relevant to small businesses. In the start-up stage, your business may still be a thought or an idea—you want to develop an app for dogs to meet-up, you have a killer vegan lasagna recipe, you have the perfect ASMR voice, and you want to share it with the world. We love that, and we love you. Let’s dive into some of the challenges you’ll face along the way.
- Focus: You got the goods, but what are you going to do with them? This is the perfect opportunity to explore your market, establish your niche, develop a brand guide, and test out new cupcake flavors (we’ll be right over). The point is, explore how you can utilize your skills while establishing a structure of how your small business will run. Ask yourself the tough questions and get ready to get real.
- Money: When you’re starting, managing cash flow can be a significant hurdle. From the get-go, be sure that you are all about setting financial goals. The earliest days of building your business will require a lot of planning and budgeting. Be honest and recognize where you are—do you have money to spend, or will you need to stay at your corporate job a little longer? Will you need to get a loan? Will your significant other/fur baby be okay with this endeavor? These things, you’ll need to know.
Stage Two Of Business: Start-Up Mode
Look at you! You’ve made it out of the realm of imagination and become CEO of your own company. Just imagine all the joy you’ll be bringing to the world. You might be wondering what milestone marks this critical stage of business. Well, by this point, your small business will exist in legal terms (i.e., you’ve bought a domain, filed an LLC, wrote a letter to the Ministry of Finance, etc.). Your products and services are now in production, and you even have a customer! *rolls out red carpet* This is an exciting and terrifying time for small business owners. Let’s take a look at what you need to know.
- Focus: Your sales might be low, but your ambitions are through the roof. This is a great time to think about marketing strategies and how you’ll target customers. How will you present your services/products? Will you need a website, booth at a farmer’s market, billboard, or sign twirler? Your primary focus at this stage is to acquire customers because we all know people need your plumberry jam in their lives. *drool*
- Money: Business finance at the start-up phase can be complicated. You want to be able to increase profit margins without killing yourself in the process. As you start to generate business, you may be spending more than you’re making (which is not fantastic). The solution is to start planning—track and report all your finances. Whether it’s working with a professional *raises hand* or utilizing accounting software, do so like yesterday.
Stage Three Of Business: Survival Of The Fittest
No pain, no gain. When it comes to building your business and finances, this couldn’t be more true. Once you’ve reached this stage of business, you’ve been able to prove that your business is viable. You’re still in the “mom and pop shop” category but ready to take it to the next level. Your customers love your designs/copy/social posts/kombucha. At this point of your financial goals, you are in it to win it.
- Focus: More than likely, your organization is still simple. There’s you (the CEO and founder), maybe you’ve been able to hire a few employees (sales manager or assistant), and you’ve got the support of your community (your cat can’t get enough of your hand-embroidered tote bags). Consider opportunities to expand your portfolio of products/services, explore marketing tactics, and invest in a larger coffee pot (you got some late nights ahead). Also, look at ways you can automate—as you grow, you’ll need solutions that will create more space for you to manage your business. You might include email marketing, billing, invoices, credit card payments, etc.
- Money: Once you’ve created a presence, and you’re starting to bring in revenue, managing your small business cash flow needs to be at the forefront of your strategy. The more money you have coming in and going out, the more mistakes can happen—ultimately resulting in the loss of time and money. At a minimum, you should be generating enough cash flow to break even and maybe cover the costs to repair or replace the capital you need to run your business effectively. As your financial needs increase, so will your financial goals. If you haven’t so already, start considering a professional, they’ll have the expertise to manage your business finances and help you grow. *raises hand again*
Stage Four Of Business: Growing For It
Okay, we see you. You’ve got a friendly little business going, and you’re hitting some of your financial goals. You’ve got a taste of success, and it’s delicious! Many small business owners at this stage of business are exploring building on the company’s success. Is it time to expand your cheese shop to offer wine? Or keep the company stable and look into delivery services? The possibilities are endless.
- Focus: With growth come significant responsibilities—particularly as the company’s CEO/Founder/HBIC. If growing your business is a financial goal, take some time out to reassess your business plan. Things probably look a lot different now that your baby business is growing into a real person (with its thoughts and feelings, no less). To conquer this stage of business development, focus on management. Your time is valuable, and if you haven’t done so already, you need the right people on-board to help you run the company more formally. The lack of resources is a real deal-breaker; it’s time for a dream team.
- Money: With your current income and cash flow in a relatively stable place, your accounts have undoubtedly become more complex. You’re spending large amounts of money on increasing your staff and resources, you’re investing in office space, and don’t forget about that holiday party you’ve got planned. People rely on you to make sound financial decisions, which include minimizing your tax liabilities while maximizing your tax benefits. The additional costs are more than just salary; that’s why you’ll need to hire a professional (in-house or out of the office) to manage your business finances. There are no excuses at this point in the game, so go ahead and give us a ring.
Stage Five Of Business: Spread Your Wings And Fly
You are T-H-R-I-V-I-N-G. Your baby business is all grown up, and you couldn’t be more proud. You’ve exceeded your financial goals, accomplishing more than you have ever dreamt possible. We could not be happier for you! Although you have reached a commendable level of success, that doesn’t mean you can jump ship and run off to a remote island and let the company run itself. Well, strike that. You always have the choice to do so (preferably with a blended cocktail featuring a tiny umbrella); however, you’ll want to get things in order before you do so. Let’s proceed, shall we?
- Focus: Business has become routine, and your loyal customers can’t get enough of your pumpkin cheesecake. Remember, the market is relentless and competitive (that bakery down the street now has pumpkin cheesecake with a chocolate drizzle). It’s easy to get distracted, but there’s always a potential for disaster ahead (like a pandemic). Stay focused on the bigger picture—the economy, competitors, productivity, and customers who no longer like pumpkin. If you are looking to continue to grow, explore new markets into which you can venture. If you do so, be sure to do your due diligence; going into unchartered territories can be treacherous.
- Money: Business owners who reach their financial goals in this stage may also experience a decline in sales and profits, while cash flow continues to be relatively stagnant. Many times, this can be the beginning of the end for a small business. But no worries, that’s why we’re here! Cutting costs and finding new ways to sustain cash flow is crucial at this stage in business. Your company needs to expand its life cycle by reinventing itself, which requires financial resources—a detailed operational and strategic business plan to accommodate the changing trends. Simply put, it takes money to make more money.
Entrepreneur to entrepreneur, the truth is that the right financial goals can bring your business dreams to reality.
Maybe your *little* project thingy that you’ve been mulling over during quarantine is calling, and nothing is stopping you. By understanding the stages of business, you can set yourself up for success—we like to call that competitive advantage.