Approximately half of small businesses fail to survive the first five years of operation. While these initial years can be difficult, businesses tend to improve as the years pass, and survival rates increase across industries. Prospective business owners should familiarize themselves with the various stages of business, and do all they can to ensure their company’s continued success and competitiveness. The different stages each bring unique challenges and opportunities for growth.
Analyze your financials
An analysis of your financials can help you determine whether you should make any changes to improve your business. For example, you can assess how well you are using your capital and how your business is able to save money. It will also help you gauge whether or not you need to make changes to increase sales or cut costs. Financial statements contain a variety of detailed metrics that will give you a better understanding of your company’s health and future.
Writing a business plan
You may want to tailor the language and detail of the business plan to each specific reader, but you shouldn’t make it your personal plan. Write from the perspective of your target audience, and use evidence to support your claims. For example, if you’re seeking funding from a financial institution, you’ll need a more detailed plan than if you’re looking to raise funds on your own.
Growing too soon or too slowly
As your company grows, you may have to give up your right to control the pace of expansion. If you grow too quickly, you may lose focus on core business functions and take on too many tasks. Overwork can lead to frustration for both your employees and your clients. Growing too slowly may lead to inadequate control over your budgeting, which can derail your success as a business.