If your business has survived to make it to the important 5-year point, that’s very good news. Your company must be doing something right if the market is still interested in what you offer. It also means your startup has the real possibility to create viable growth. There may still be some risks, but also key opportunities as you move forward in the next chapter of your business. Being mindful of them can make a big difference to your success.
Will you be able to oversee cash flow effectively?
For some startups, raising too much money too soon can spell doom. Companies can be buoyed by the prospect and make decisions without hesitation like building a bigger product or expanding much too quickly. Then later, when the business needs money, it isn’t readily available. These kinds of cash risks are typical in most stages of a business. In the very beginning, your coffers may be filled with money but by year five, it is important to be creating a steady revenue stream, no matter how small, because we all know you can’t count on capital infusions forever.
The time may also be right for looking at expenses to see if they have stabilized. Investors routinely harp on startups spending extravagantly with fancy offices, wasted hires and excessive marketing campaigns that don’t pan out. Some others throw a ton of money into product improvements that are really not needed.
It’s important to be careful about what you spend because in the next few years, you’ll likely want to ramp up things to capture more customers, hire new employees and build out your infrastructure. That all sounds good, but will you be in a position to do them?
Staying on top of your market
Whether we like it or not, markets are constantly changing and competitors are adapting quickly. If you don’t step up and match the pace, you’ll fall behind. Now is the time to take a measure of the market and how you fit. In 5 or 10 years will there be a demand for your product or service? If not, what are you prepared to do?
You will always need to stay current and pay attention to your competitors to see what they’re doing and where they’re going with new products and services. How will you stay in front of them? It helps to listen to your customers and follow conversations concerning your brand. Invite feedback and incorporate it into your efforts. Also, take a closer view of your business model. Is your revenue predictable or difficult to determine? What about your customers? Are the phones ringing steady or are you nervously awaiting the next big order? If that’s the case, it may be time to revamp your strategy.
Are you ready to take the next step?
There are all kinds of ways to generate revenue. Decide what model works best for your company and can be viable long term. Once that takes place, you can begin thinking about scaling up.
As you expand your footprint in the market, there are a number of questions that have to be answered. Do you have the capital and traction to expand? What ways will you do it? Will you begin selling direct? Will you leverage other sales channels? What about marketing to the masses? Also, how about employees? Are you hiring the right people and keeping a careful watch on the company culture? Typically, in a small startup, it’s not difficult to manage employees, but as things change and teams grow, new procedures are needed to keep things running effectively to avoid certain pitfalls.
Also, as you move forward, it’s wise to stay mindful of your mission and your values and let those help in determining your path.
After five years, with a solid business model and a reliable source of revenue, it’s a safe bet you have moved from the startup phase and are on your way to an established entity. As you continue your accent, different risks and rewards will be there no matter what. But how you respond will determine your evolution and ultimate success over the next phase of growth.