While it's true that every business is different from the next - and every entrepreneur will go on their unique journey - there are still a few constants we know to be true.
The start-up phase, for example, is when you write a formal business plan. You secure financing, select your business structure, and do all the other work required to get your enterprise off the ground. On the other end of the spectrum, we have the maturity phase, when you do what it takes to remain competitive and sustainable for as long as possible.
In between that, however, we have what is known as the growth phase, which often catches many new entrepreneurs, particularly off-guard. Still, this is an exceptional opportunity to grow from the business you're running into the one you hoped you'd be in charge of when you started, provided that you can keep a few key things in mind.
Maximizing Business Growth: Breaking Things Down
As stated, the growth phase of any business is all about two things: expansion and innovation. The first is natural because as your company begins to grow larger, you need to adapt what you're doing to accommodate for that and embrace it. You can only get to that point with innovation, however. This is when you determine which of your current efforts are working and which aren't and adjust accordingly.
From the financial side of the spectrum, one of the significant things you'll want to account for during the growth phase is taxes. During growth, federal, state, and local taxes are subject to laws that frequently change without warning. Keep track of (or at least hiring a professional to do so) these changes can help you better understand what choices you need to make in terms of structuring, what types of incentives you can offer to your employees to help empower innovation, and more.
Along the same lines, you will also make specific considerations regarding your accounting in general. During this stage of your business' life, you'll want to work hard to A) generate a consistent income so that you can B) attract as many new customers as possible.
Use this to re-evaluate your current systems for the best results, with IT being chief among them. What do you need to be able to do to generate consistent income that you can't do right now? What did you once need but don't any longer? These are critical questions to answer to help make sure that your business' value continues to grow with its size.
Slow and Steady Wins the Race
During the growth phase of your business, you'll also at least need to acknowledge that you are more subject to specific economic considerations than ever - some of which will be beyond your control. Because of that, you'll need to keep a close eye on factors like cash flow and ensure you understand how much you have available to be used as leverage. You'll need to start making decisions with all key stakeholders in mind. That includes but is not limited to customers and any other owners and regulatory bodies in mind.
Finally, understand that your finances will grow as your business does the same. That's why, during this phase of your company, it's equally important to focus your attention inward whenever possible.
If you still need to start, now would be an excellent time to talk to a professional about factors like estate planning. You'll also want to have frank discussions about the amount of taxes you'll be exposed to. Even though retiring may be years or even decades away in your mind, it's never too early to start thinking about who your assets will eventually pass to moving forward.
In the end, know that every stage of your business' life will be one that you must remain actively involved in for the best results. The things you're concerned about in the start-up phase will naturally change as you move into growth, maturity, and beyond. Regardless, you'll always want to make decisions with an eye toward short-term gains and long-term opportunities. The better you get at doing that, the more success you'll be able to create for yourself in the future.
If you'd like to find out more information about how to effectively plan for and make the most of the business growth stage of your company, or if you'd like to discuss your needs with an expert in a bit more detail, please feel free to contact us today.