There are a few stages in the lifecycle of a business. From the moment you open the doors to the moment you sell, a company will experience various ebbs and flows as it progresses.
By understanding the different stages of your business, you’ll have an idea of what to expect.
Here is a brief guide to the business lifecycle.
Startup
The first step is forming your business as you want it to operate. Sometimes things may change along the way, but establishing the groundwork is always the starting point.
During this period, you’ll be putting together your business plan, researching your target market and identifying your brand and core values. You’ll set your financial goals in the business plan and create forecasts and projections. This will be essential to help secure funding from investors and lenders alike.
The next step is to hire employees and build a customer base. You’ll want to market yourself as much as possible to ensure you have a solid start in your new business.
Growth
Once you’ve opened the doors to your new business and settled in, your next step is development. You’ll want to keep your business growing if you want to meet your financial goals and the financial projections you set out in your business plan.
To achieve sustainable growth, you need to consider your cashflow. Maybe there are certain things you can cut back on now you know how to deliver your service. Or perhaps you can look into investing back into the business with any profit you’ve made.
You’ll be aiming to break even and maximise profitability during the growth stage of your business. Consider setting some money aside for emergencies or potential future opportunities.
Maturity
This is the time in your business’s life when you should be stable and making a steady profit.
During this stage, you may be able to train staff to take over the day-to-day and allow yourself the time to step back and start looking at the bigger picture.
As your operation will be steady by this point, you can focus on other opportunities, growing your customer base and maybe consider tapping into other markets.
Transition
Most businesses will experience a transitional period during their lifetime. When things change, either negatively or positively, this is the time when you and your business need to adapt.
Sales could be declining, or you’re experiencing growth faster than anticipated. Either way, you will need to know how to manage the changes. You may need to start looking for further funding to help cope with the influx or decline in business.
Focus on strategic planning during this stage, as you’ll need to identify your business’s strengths and weaknesses, allowing you to focus your resources where they’re best placed.
Succession
Succession will be the final stage in your business’s life. Maybe you’re considering retiring or just selling it on to someone else.
To do this, you’ll need to start with a valuation of your business and its assets. You’ll want to make sure the money you’ve put into your business comes back to you, so understanding the value of the business is crucial.
During this phase, you should prepare your final documents, find buyers (if you aren’t passing on a family business) and get your finances in order.
Having the help of an expert accounting team like the one at Condies & Co will make this a smoother process.
After the sale has been negotiated, it’ll be time to close the deal, legally signing over the business and its assets.
If you need any help throughout the lifecycle of your business, Condie & Co is there to support you. Our team has years of experience helping start-ups and can provide investment advice to help get your business off the ground.