The journey from the birth of an idea to a startup and if successful, through to the growth and maturity stages.
Each stage is characterised by its own challenges and obstacles to overcome as well as opportunities to grab.
To succeed you have to be flexible and adapt your business objectives, priorities and strategies as you move along.
Build a stronger, healthier business
Are you running a business, launching a startup?
90% of small businesses fail in the first 10 years. It often boils down to poor planning, preparation, and decision-making. Identifying your current stage in the lifecycle will keep you ahead of the game.
Core Business Functions
Irrespective of the current lifecycle stage of an entity, there are some business functions (activities, processes) that must always be performed to ensure the entity's ability to protect its assets, meet organisational needs and satisfy laws and regulations.
Failure to carry out such functions could jeopardise the operations of the organisation in the delivery of its products or services, resulting in the entity suffering from serious operational, financial, goodwill and legal losses, damages and penalties.
Manage business compliance, tax obligations and ongoing reporting requirements
Examine the entity's compliance with contractual terms, legal and regulatory requirements
External audit of financial statements by independent auditor
Examine the effectiveness of internal controls, risk management and governance in achieving objectives
Disclosure of financial results and related information (statements of profitability, cashflow and financial position) to internal and external stakeholders about the entity's performance over a period of time
Establish and maintain a solid corporate governance structure for the management, direction and control of the business
Set the true price for your offering by establishing the correct cost of your product or service using appropriate costing methods and techniques
Maintenance of accounting books and records
Assess controls relevant to the entity's IT infrastructure
Manage risk within the entity, design and implement effective and efficient internal control systems, business continuity and disaster recovery plans
Design and implement a credit rating policy considering credit granting, terms, limits, collection of dues
Establish a budgeting process that covers creation, revision, monitoring and correction
Reporting of financial and operational information to internal management for decision making purposes
Manage human resource capital (recruit, train, develop and retain staff)
Obtain industry specific licenses and other registration requirements from various regulatory bodies
Register, protect and commercialise intellectual property (copyrights, business names, trademarks, patents, domains)
Seed
Business is just a thought or an idea
Match business opportunity with your skills, passions, experiences
Assess feasibility and viability of the idea by analysing advise and opinion from industry specialists as to its potential
Seek market and industry research and acceptance
Examine availability and applicability of innovation, research & development grants
Consider possible sources of funds and the relevant financial terms
Develop a business model and prepare a business plan
Startup
Incorporate a business considering possible legal forms (limited company, branch, partnership, sole practitioner, etc.)
Business is incorporated and product or service is developed and offered to customers
Raise capital to fund the startup, analyse sources of funds and the relevant financial terms, negotiate terms for funding and capital raising
Examine international tax planning structures with the aim of minimising tax liabilities
Define the business strategy, set priorities, allocate resources for implementation
Obtain industry specific licenses and other registration requirements from various regulatory bodies
Apply for innovation, research and development grants depending on availability and applicability
Register, protect and commercialise intellectual property (copyrights, business names, trademarks, patents, domains)
Manage human resource capital (recruit, train and develop staff)
Carry out market - economy wide research to identify shifts in customer needs and tastes, major competitors and their business model
Develop the entity's IT strategic development plan covering IT risk assessment and insurance, IT systems technology diagnostics
Establish a budgeting process that covers creation, revision, monitoring and correction
Growth
Business consistently adds new customers and grows its revenue at an explosive rate
Re-evaluate and update business model and business plan
Examine availability and applicability of innovation, research & development grants
Redefine the business strategy, reset priorities, allocate resources for implementation
Manage the entity's IT strategic development plan covering IT risk assessment and insurance, IT systems technology diagnostics
Establish an effective management reporting process to support core business strategies and initiatives
Manage customer credit policy (credit period, credit terms) to control expanding customer base and revenue growth
Assess the environmental and social effects as a result of economic activities
Established
Business holds a respectable position in the market with loyal customers and manageable sales growth
Assess how efficiently and effectively a process or activity is performed
Assess the capabilities of an entity's management team
Re-evaluate risk within the entity, update internal control systems, business continuity and disaster recovery plans
Manage the environmental and social effects as a result of economic activities
Manage human resource capital (motivation of staff, delegation of authority, training)
Carry out market - economy wide research to identify shifts in customer needs and tastes
Manage and improve quality of product or service
Manage the entity's IT strategic development plan covering IT risk assessment and insurance, IT systems technology diagnostics
Assess the adequacy of controls relevant to the entity's IT infrastructure
Financial modelling, assessment and restructure of existing debt to improve flexibility and reduce cost of financing
Expansion
Business expands in new markets and distribution channels for increased market share and access to new revenue and profit channels
Consider expansion through mergers and acquisitions, acquisition target search and screening, financial due diligence, synergy analysis, negotiations, integration strategy and planning
Assess feasibility and viability of new idea by analysing advise and opinion from industry specialists as to its potential
Redefine the business strategy, set priorities, allocate resources for implementation
Revisit business model and prepare a business plan for the new venture
Identify target markets, seek market - economy wide research to identify shifts in customer trends, analyse competition
Obtain valuation of the target's business or its income generating assets
Raise capital for new venture, analyse sources of funds and the relevant financial terms, negotiate terms for funding and capital raising (initial public offering, private equity funding, new equity-debt capital raising)
Assess the needs for human capital (specialised skills, training, new talent)
Examine international tax planning structures and how to fit in the new venture
Obtain industry specific licenses and other registration requirements from various regulatory bodies
Protect and commercialize intellectual property (copyrights, business names, trademarks, patents, domains)
Examine availability and applicability of innovation, research & development grants
Incorporate new business venture considering possible legal forms (limited liability company, branch, partnership, sole practitioner, etc.)
Maturity
Business is mature with stable revenue and profits year by year, however due to fierce competition it struggles for marginal growth or to prevent revenue and profits from declining
Consider a step back towards further expansion (Expansion stage) or a step forward and devise a possible exit strategy (Exit stage)
Assess how efficiently and effectively a process or activity is performed, manage costs at all levels
Assess the capabilities of an entity's management team
Examine the effectiveness of internal controls, risk management and governance in achieving objectives
Consider changes to human resource capital (new management team or CEO with fresh ideas)
Carry out market - economy wide research to identify shifts in customer needs and tastes, major competitors and their business model
Assess and improve quality of product or service
Αnalyse the value of the entire entity or its income generating assets or business units
Consider the possibility of divestment, de-merge, spin-off, sell or terminate of non-core assets or business units
Financial modelling, assessment and restructure of existing debt to improve flexibility and reduce cost of financing
Attempt to rescue the business as a going concern, investigate the affairs of the financially distressed business, implement recommendations, enter into restructuring plans with creditors
Employ turnaround management strategies aimed towards financial recovery of a business that is performing poorly, business restructuring, business rescue
Exit - Dissolution
Business is either dissolved via liquidation procedure or sold to another party. Secured creditor or court may place an entity under the governance of a receiver to control (manage, sell, secure, realise) part or all of its assets.
Consider filing for a Members voluntary liquidation (bankruptcy procedure), whereby operations of the business are brought to an end, assets are divided among creditors and shareholders according to priority of their claims
Obtain valuation of the entire business, its income generating assets, business units, any intellectual property and intangible assets
Examine the possibility of divesting separately identifiable business units or capital assets on more favourable terms as compared to the sale of the business as a whole
Examination of tax returns to assess the correctness of tax liability, settle all outstanding tax matters and liabilities
Consider capital gains taxes arising on profits realized on sale of capital assets (land, buildings, shares, bonds, precious metals, etc.) or upon sale of the entire business
Additional resources
As you progress through the lifecycle stages, you must anticipate and plan your actions to minimise or overcome any potential challenges and obstacles. There is an array of resources to exploit.
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Professionals are needed every step of the way, whether to incorporate a company, secure a patent, manage taxes.
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