The Seed Stage
The seed stage of your business lifecycle is when your business is just a thought or an idea. Most seed-stage companies will have to overcome the challenge of market acceptance and pursue one opportunity. Don’t try to take on too much at once. At this stage of the business the focus your focus should be on making sure your idea works well with your skills, experience, and passions. You’ll also need to decide on a business ownership structure, come up with a business plan, and get funding. You might be able to self-fund your business, get investments from friends and family, or apply for government grants. If you have some sort of existing client base for your business already, you may be able to get them to invest.
The Start-Up Stage
Once your business legally exists, you’ll need to make sure you can provide whatever products or services you’re planning on selling, and establish a customer base and market presence. You might need to change your business strategy or raise more cash if your expenses are higher than anticipated.
The Growth Stage
If your business is growing, that means that your revenue and customer base are also likely growing. You might need to hire and train new employees to handle with the additional workload that comes with a growing business. You may also need to invest additional money in the company to maintain your success. If you don’t have enough cash available, you might be able to take out a loan through the Small Business Administration.
The Established Stage
It’s still a lot of work to maintain your business once it’s become self-sustaining or even profitable. Make sure you’re maintaining or growing your revenue stream by keeping up with any new developments in the industry or changing customer preferences.
The Expansion Stage
If your original business is doing reasonably well, or if it can’t grow anymore without a new customer base, it may be time for the business to expand into a new market. In some cases it may be easier for you to expand into a small, niche market, because a larger market is likely to be more competitive and may take longer to break into. Make sure you do plenty of planning and research before deciding where to invest your resources. You may want to focus on markets that are related to your existing business.
The Decline Stage
In the decline stage, sales, profit, and cash flow all decline. A business owner might be forced to sell or close their business if they cannot sufficiently cut costs or increase their profits. A business might be able to avoid declining by reinventing itself, or branching out into new markets or technologies. That way, it can reposition itself and begin new growth in the marketplace.
The Exit Stage
There are a few ways you might leave a business that you started. You might be able to sell your business and start a new venture, the business might not have worked out, or you might be ready to completely retire from work.
Can You Sell Your Business?
Even though it might have taken years of hard work to build the company, you’ll need to consider its real value in the current marketplace. A qualified valuation expert can help you figure out the fair market value of your business and may be able to help you come up with a strategy to help you increase the profitability of your company before you sell.
Closing Your Business
In some situations, you may need to close rather than sell your business. If you have any partners, you’ll need a written agreement when closing the business. If you have an LLC or a corporation, you need to legally dissolve it. You’ll need to cancel any registrations, permits, licenses, and business names as well as your Employer Identification Number. Make sure you notify federal and state tax agencies that you are closing your business. Make sure all your financial obligations have been met. Pay any employees you might have, and handle final returns of income tax and sales tax. You’ll need to maintain business documents after the business has closed, including tax and employment records. If you can, you’ll also want to consult with a tax expert or financial advisor while closing out your business. That way you can make sure you’re meeting all of the necessary requirements.
