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Four stages to entrepreneurial success
1. 7/19/2018 Four stages to entrepreneurial success
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Four stages to entrepreneurial success
As in life, all businesses go through di erent phases of development. With each phase of
development, there are di erent needs that are more acute or important.
“Researching and analyzing our privately held family businesses over the years, we have concluded
there are four phases of an entrepreneur’s business life cycle: startup, growth, maturity and
succession,” says Je rey Neuman, president of Barnes Wendling CPAs.
Smart Business spoke with Neuman about the phase of a business’s life cycle and the key needs
companies have at each stage.
What characterizes the startup phase?
The startup phase is an exciting time for a business and represents its rst ve years. It is the
stage at which the emergence of ‘the idea’ comes into play. Companies in this phase typically:
■ Implement the business plan.
■ Establish an organizational structure.
■ Determine their choice of entity.
■ Establish working capital needs.
■ Implement simple, yet e ective nancial and management reporting systems.
■ Acquire a proper location and facilities.
■ Anticipate personnel requirements.
■ Determine the costs of products or services to be rendered.
■ Select a payroll service provider.
■ Allocate time to analyze and brainstorm ‘the vision.’ Consider the utilization of an outside
advisory board.
What stands out at the growth phase?
In the growth phase, the hard work of the prior phase is paying o and the business is heading for
success. This phase usually begins around the fth year, lasts until around year 15 and should
include:
■ De nition of goals and strategies to manage growth and remain focused.
■ Focus on working capital needs to accommodate and sustain growth.
■ Anticipate and develop personnel and establish an organizational structure to facilitate growth.
■ Re ne and redesign the nancial and management reporting systems to measure performance
and have accountability.
■ Implement employee retention programs and employee bene t plans. Formalize the business’s
marketing strategy.
■ The entrepreneur moves into a focused leadership role, becoming more of an administrator
and delegator.
■ Enhance communication systems to foster continuous improvement and a total teamwork
attitude. Move from a reactive to a proactive culture.
What is the focus at maturity?
The maturity phase starts at the 15th year and lasts until around the 25th year. Here:
■ Pro tability is usually stable and planning is more consistent.
■ Divergent thinking is embraced to continue to expand the business in a more controlled
manner.
■ Asset management becomes an important priority. Development of compensation and
incentive plans for non-owners are evaluated and instituted to bolster a high level of
entrepreneurial spirit.
■ Executive leadership should be highly focused on working as a team.
■ Re-evaluation of the essential costs of providing products or services is crucial to maintain
market share.
■ Personnel development and continuous education allows for fresh ideas and improvements to
By: SBN Sta | 3:01pm EDT June 26, 2018
Je rey Neuman
president, Barnes Wendling CPAs
Contact
(216) 566-9000
www.barneswendling.com
jdn@barneswendling.com
Connect on Social Media
LinkedIn
Twitter
Google+
Facebook
Learn how Je rey Neuman
can help your business
succeed at any stage of its
life cycle. Visit his bio page
at
https://www.barneswendling
d-neuman/
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