Small businesses go through different stages in their lives – here are some of the lifecycles I come across with the companies I work with.
Thinking of an idea
At this stage people want to know if their idea will work and if it will make any money. They also need to know how to go about setting up such a business.
Often, people will come to me with the germ of an idea, or a new opportunity which has presented itself, and I’ll tell them if I think the idea has potential and what they need to do next. These next steps might be:
- Research the idea further – often people have an idea of what they’d like to do, but key questions about whether people would buy it, how much they’d pay, and who would buy it are left unanswered.
- Plan your finances. Sometimes what looks like a great money spinner can turn out not to be quite as lucrative as you first think. Spend some time planning out the money side of your business, and make sure you’ve thought of all the little things that are going to come up.
6 months old, and waiting for the phone to ring
Often, people start up a business, but they’re still waiting for those customers to come and buy. Sometimes you get an initial swell of customers from all the marketing you did when you first started, but between 6 and 9 months into the business, these can start to die off.
The main issue facing businesses at this point is how to boost your marketing. This can also be a low point financially – maybe you’ve had enough of living on baked beans while you start up, or, like many people, you’ve underestimated the amount of time it will take to get going. So you’re probably going to need some very cost effective marketing ideas – which is where I come in.
Established company, but ready to grow
This is the stage where a company starts to think about growing. Quite often, this is someone who has been operating as a freelancer or sole trader and they want to change into a bit of a bigger operation.
Key things to think about here are:
- Increasing your marketing to make sure there’s a steady flow of work
- Should you take on staff, or would you be better using freelancers or outsourcing some of your admin?
- Where you work from – is it worth moving from a home based business to some proper office space
Getting to be a grown-up company
When a business has been going for a while ( and this can range between a year, and 20 years) you get the feeling that you want to grow it to something bigger and better. To make your company into something that can earn you some serious money, and perhaps to build it up to where you can sell it in a few years time.
This is a crucial stage and one where people often feel that they need some help and support to step out of their comfort zone and really go for what they want.
At this stage, you’ll probably be feeling that you want to get everything done properly. You’ll want to make sure that everything is legal and above board and that you’re following best practice in everything that you do.
You will be thinking about a more sophisticated marketing campaign that will bring in substantial amounts of new business, and you’ll need to think very carefully about the financial aspects of expanding the business – cashflow planning becomes particularly important here.
Above all at this stage of your business, your role will change. You’ll probably spend less time actually doing whatever it is that your business does, so less time looking after customers or building websites, and you’ll need to spend more time on marketing and supervising others. Michael Gerber sums this up in his E-Myth series of books, as “working ON the business, not IN the business.” I often remind clients that they need to start acting like the Managing Director, not the sales assistant.
Rapid Growth Company
This is the company that wants to push a fast expansion and get big fast. It might be that you’re operating in a market where you have to be reasonably big to make a decent profit margin (eg, FMCG or import/export) or maybe you’ve just got big ideas about what you want to do.
The big issues here are:
- How to handle staff as you grow (recruitment and retention can become hot potatoes if you don’t get it right)
- How your growth can be sustainable, making sure that you don’t expand too quickly. Financial planning is especially important here, as cash flow is the number one killer of companies that want to expand.
- Marketing and distribution. It sounds obvious, but if you’re going to expand, you’ll need to make sure that there’s plenty of business coming your way. Plans for rapid expansion mean that marketing will take up a lot of your attention.
Launching a new product or service
You might have been running your own business for some time, but now realise that you want to do something completely different – lots of Joy of Business clients are serial entrepreneurs.
The trick here is being able to develop the new enterprise while keeping going with your existing business. You need to be able to focus on the important issues, and keeping your eyes on the right ball can be very challenging. Often I see that the new idea has fallen by the wayside when the client is faced with the need to keep the old business going because that’s the one that pays the bills.
Planning to sell
I’m often called in when the business owners have decided that at some point they want to sell the business. You need to decide this at least 18 months before a sale so you can get the company ready to sell at the best possible price. I help people to maximise the profit from the company, enhance reputation to get buyers interested and make sure that the company has the right processes in place so that the business owner can leave without the organisation falling apart.
What stage are you at?
Are you getting the right help to make sure that you’re making the most of your business?
If you’d like to talk over any of these issues, do get in touch and I’ll see if I can help.
Photo credits to Luca Bravo, Roman Kraft and Pavan Trikutam on Unsplash