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 this phase is outgrown, and long-term success means moving on to the next step.
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”. Essentially, it’s when you feel that you’ve met your early goals, and a shift is needed to avoid stagnation and achieve further growth and long-term stability. Below are some considerations to keep in mind when you decide it’s time to take your consultancy beyond the startup phase.
Consider Your Staffing Needs
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 independent consultancies are often one-person businesses, 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 needed to continue to grow beyond a startup, and your ability to continue to meet these demands on your own. Don’t forget to research firms, like MBO Partners, to see if you can spend less by signing onto an established company that provides business support.
Revisit Your Business Plan
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 take your consultancy to the next level; you need a plan that considers long-term success in addition to immediate needs. Have your goals changed? Has your target clientele shifted? Have you significantly narrowed your focus to specialize – or extended your businesses offerings with added services? As you restructure your business plan, keep these questions in mind. 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 consultancy, it’s likely that limiting startup costs was a top concern when selecting the equipment and services that were necessary to get your business 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 your business’ continued growth. Perhaps an antiquated computer is slowing you down, or a printer with upgraded features would allow you to boost efficiency and cut costs by creating 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 if they will give your business an edge for long-term growth.
Streamline Your Processes
The startup phase is often about figuring out the right business processes to help your consultancy run smoothly. To grow your business, you need to take what you’ve learned – to make it more efficient. What this means will be different for every consultant, but could include anything from creating a more effective daily schedule, standardizing a project workflow system for efficiency, using technology to improve filing and organization, or automating your billing system.
Independent consultants should consider these eight things before creating a business plans.
News and notes for the independent workforce and their clients. This is the October 24, 2016 edition.