In a recent Inc. Magazine article, Samuel Edwards details seven stages of business ownership from initial inception through making an exit strategy. Each of these stages presents its own distinct set of challenges and rewards, but understanding where you’re at in what I call the “Entrepreneurial Life Cycle” can provide invaluable insight.
- The idea – This first stage goes a bit deeper than just coming up with the your idea. At this stage, you will be securing resources and financing as well as starting to think through your operational game plan – getting everything ready for when you open doors.
- The launch – This denotes the formal start of your business, when you’re securing your first clients and getting down to work. It’s crucial to stay limber during this stage so that you can intelligently attack problems you never saw coming.
- Survival – This stage can be the most stressful because it’s the race to critical mass, the battle for sustainability. This is when you want to really hone in your processes for maximum efficiency.
- Floating steady – Once you have your core team and clients in place, you can perhaps catch your breath for a bit. Here is when you really push to maintain your established sustainability.
- Growth – At a certain point, you’ll be hungry for more and eager to build something great. This is you lean on your sales and marketing efforts to bring in new business, since you’re operationally sound and know you can handle it.
- Evolution – If you keep growing, eventually you’ll need to adapt your processes (and sometimes your core business) to continue to progress. This could include mergers, acquisitions, creating new departments, etc.
- Exit – No matter what, you’ll eventually stop working. Be it retirement or a sale (or something more dire), it is essential have a functional succession plan in place.
Every business is unique and as such, each business’s timeline through these stages will be different. Many also will take diversions, but these stages represent a clear path to keep up with planning and forecasting throughout the life of your business.