The startup phase is vital for any small business or consultancy; it gives you the opportunity to develop an idea or passion into a functioning business and viable career. However, there will come a point when you outgrow this phase and long-term success means moving on to the next step.
So, how do you know when it’s time to move on? There is no hard and fast definition; some use consecutive periods of positive cash flow as an indicator while others place a time limit on operating as a startup. When you start to feel that you’ve met your early goals, and a shift is needed to avoid stagnation and achieve further growth and long-term stability, it may be time to start thinking about that next step. Here are four considerations to keep in mind when you decide it’s time to take your small business beyond the startup phase.
Many independent consultants are drawn to their line of work by the ability to work for themselves—but that doesn’t mean you have to work by yourself. While independents often operate as a one-person business, some consultants find that bringing on employees—such as assistants or office managers on either a full-time or part-time basis—can provide the extra manpower needed to help their business grow.
Take a close look at your current and expected workload, the revenue need to continue to grow beyond a startup, and your ability to continue to meet these demands on your own. Don’t forget to consider firms like MBO Partners to see if you can spend less by working with an established company that provides business support.
Take this opportunity to go back and revisit your current business plan and evaluate what changes will help you reach the next level. If your consultancy has succeeded and is outgrowing the startup phase, it’s likely that a strong business plan was instrumental in the process. However, the business plan that helped you grow from a concept to a successful startup is not necessarily the one that will continue to grow your business. You need a plan that considers long-term success in addition to immediate needs.
As you restructure your business plan, keep these questions in mind: Have your goals changed? Has your target audience shifted? Have you significantly narrowed your focus to specialize, or have you extended your business offerings with added services? Evaluate which elements of your business plan have been successful, which have failed, and which are no longer appropriate or applicable to an established consultancy.
When you launched your business, it’s likely that limiting startup costs was a top concern when selecting the equipment and services to get up and running. Now that you’re on your feet, it may be time to dedicate some of your budget to upgrading or adding resources that will be vital to the continued growth of your business.
Perhaps an old computer system is slowing you down, or an upgraded printer would allow you to boost efficiency and cut costs by being able to create more deliverables in house. This may also be the perfect time to increase your marketing budget to attract new clients. However, don’t make the mistake of spending simply for the sake of spending if your current strategy meets your needs for the immediate future. The key is to make investments only fi they will give your business an edge for long-term growth.
The startup phase often involves figuring out the right business processes to help your consultancy run smoothly. To grow your business, you need to take what you’ve learned and make it more efficient. What this means will be different for each independent professional, but could include anything from creating a more effective daily schedule, standardizing a project workflow system, using technology to improve filing and organization, or automating your billing system.
The Weekly Independent is a summary of news and notes about independent work from around the web. This is the November 14, 2016 edition.
As an independent consultant, you love what you do. Years of hard work and dedication to your craft should earn you the opportunity to take advantage of a relaxing retirement. The last thing one would want to encounter, however, is new uncertainties and challenges. This blog takes a look at how independents can appropriately plan (and prepare for) retirement.