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Business Life Cycle

where are you in the business cycle




A temporary organism trying to find a viable business model – Jack Delosa, MBE Education

The biggest challenge for entrepreneurs in a start up is that they are uninformed. A start up in the early stages requires a lot of ‘doing’ focused time, and an ability to learn from mistakes. If we want to survive we need to fail and fail fast. Launch, come back, re-develop and launch again. 99% of people who start a business don't get past the start up and growth phase. It is stressful, busy and difficult, and often not lucrative. The start up and growth phases are where value is created but not realised. The key to success is identifying the difference about your business that makes the difference. What makes your customers choose you?




Evolving profits, team and systems

LEVERAGE In the growth phase the business evolves. This is when you start making profits, growing your team and implementing systems. You’ve tested your product or service on the market, have got feedback, made changes and are ready to expand. The biggest challenge for most entrepreneurs at this stage is that they have unleveraged business growth strategies. Increasing the value of your business depends on a leveraged business model. Examples of leveraging are: • A developed and structured sales approach embedded in your business • Strategic partnerships with other successful businesses • PR to build your brand. Leverage is all about how we can do more with less. strategic partnerships - with other successful businesses PR - use to build brand how do we do more with less?




Looking to raise funds for growth, attract investors or advisors

Raising capital to fund growth in your business will need you to attract investors. They need to believe in you and your business and see value potential if they are going to hand over cash. The biggest challenge for entrepreneurs raising capital is they are unprepared: the business is not ready for investment. Getting prepared involves reducing risk to increase attractiveness. The lower the perceived risk and higher the potential, the higher the business value. Ways to de-risk your business include: • Diluting the founder’s involvement • Implementing systems and processes • Developing your advisor team.




Economies of scale, increases in value

Growing a business takes time. An acquisition can make you quickly grow your business, creating economies of scale and a significant increase in value. The biggest challenge facing entrepreneurs at this stage is that they are uneducated. This can lead to issues such as • paying too much • agreeing to poor or risky terms • signing a deal before seeing all of the information. Having advisors on board to help you will mean you do the right deal, at the right time, for the right price.




Are you prepared for your way out?

The biggest challenge for entrepreneurs wanting to sell their business is that they are generally undervalued. The average small business in Australia sells for twice its' annual income. Smart work increases the value of your business so that you can attract a sale of at least four times. The key to this is being prepared and attracting the right buyer, which will also mean you are the right position to instigate an alternative exit or succession plan.

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