If you want your startup to succeed, you need to live and breathe your business.
This also means understanding the startup stages. This way, you can respond with the appropriate action to move your business forward. These stages will see you move from idea to startup to maturity. While starting and running a business will always be challenging, looking at each stage of your business will help you understand what you need to overcome.
90% of startups fail. If you’re planning to be in the 10%, here are the 5 startup stages you need to know about.
1. Idea and Development
This is when you’ve got a solid business idea, but your startup isn’t yet officially in existence. Here, you begin to assess the viability of your startup.
That means getting advice and opinions about the potential of your idea from a wide range of sources. That include colleagues, family, friends, business associates, and anyone else in your industry.
You also need to begin thinking about how you’ll finance your launch. This stage is all about considering the feasibility of your idea.
Once you’ve thoroughly tested your business idea and it’s ready to go, you can launch your startup.
This is often the riskiest of the startup stages. Mistakes you make during this stage can impact your business for years in the future.
This stage is all about adaptability. You can expect to spend a lot of time tweaking your services or products based on initial customer feedback.
By the time you get to the growth stage, your business should consistently be generating income and regularly attracting new customers. Your cash flow should improve as you get recurring revenues to cover your ongoing expenses.
You should also be expecting your profits to steadily improve.
One of your biggest challenges will be managing your time. You’ll need to learn to divide your time between many tasks requiring your attention, including:
- Hiring new employees
- Dealing with competitors
- Managing customer service
- Increasing revenue
This is when you’ll learn the importance of hiring smart people.
This will help you grow quickly and let trustworthy employees take some of the responsibility off of your plate.
In this phase, running your business will start to become routine. You’ll have staff in place to handle tasks you don’t have the time (or don’t want) to manage. You’ll also have firmly established your business in your industry.
This is when you may want to begin thinking about expanding your range of products and services. Another option is to enter into a new market or geographic location.
Once you’ve navigated the expansion stage, you can expect to see stable profits each year. This is when you may begin thinking about further expansion, but you’ll need to consider a few questions:
- Is further growth sustainable for your business?
- Is there enough opportunity to expand?
- Are you financially stable enough if the expansion is unsuccessful?
- Are you emotionally ready for further expansion?
Which of the Startup Stages Are You In?
Which of the above startup stages sounds like your business? Are you effectively navigating your growth, or do you feel like you’re going backward?
Leave a comment below, or check out some of our great business resources.