All businesses start with an idea. But it’s what you do from there that make your business venture a success or failure.
Businesses come in all shapes and sizes, but they most commonly start with an idea or concept. Sure some are more innovative than others, but they go through similar growth stages, albeit different trajectories.
Regardless of how bold your business goals are, it’s always important to think about your exit plan before you get started. Is it a business that you plan to grow quickly and sell off, or are you in it for the long haul, to create a long-term nest egg or retirement plan?
So you have formulated your idea, but now it’s time to get real. You’ve registered a business name, registered your website domain, setup your email and printed your business cards. At this stage, it’s typically just you and maybe a partner. You’ve landed your first few sales or project and you’re well on your way. All going well, your quickly realise time is short supply.
Unless you have created a unique product or process, the business will have limited value at this stage.
Realising that you’re on the up, you decide to reinvest in the business, recruiting staff to help you manage the workload. Understanding it’s not yourself anymore you have to create systems and processes for staff to follow. Now that you have staff, it’s important that you bring them along on the journey, by sharing your vision and strategy for the business. You’re sales and profits are healthy, but there is plenty of room for growth.
The business is starting to increase in value, but selling at this stage might only cover your costs, rather than provide any substantial gain.
The business has reached a new level, you have more customers and more staff, that need to be managed and given clear direction. Typically, this may require the appointment of a manager to free you up to focus on the bigger picture. Your business is really starting to get noticed now, and your clipping at the heels of your competitors.
Your business is now at a point which could be sold or even allow you to divest some equity to a shareholder who shares your vision.
The days of you running the show by yourself are now a distance memory. You now have a large multi-disciplinary team who are delivering market leading solutions. You are among the market leaders and are envied by your competitors. Your key focus is on driving the business to greater profitability through business expansion, product development or business acquisitions.
The business is of considerable value now and provides you with the opportunity to exit, or take it even further.