There are 7 stages in the Business Life Cycle that every business will go through. Having a good understanding of where your business is within this cycle will better prepare you for the challenges that you will face.
Seed Stage: the seed stage of the business life cycle is exactly that – when your business is just an idea or thought.
Start-Up Stage: the start-up stage is when your business begins to take shape. You will be faced with a number of challenges in this stage – including financial obstacles and establishing a customer base.
Growth Stage: this stage of the business life cycle is when your business really takes off! Your revenue should be increasing, along with your customer base. Growth can take place very quickly – so it is important to introduce formal processes to how you run your business. The biggest challenge will be juggling responsibilities across different functions of your business and to find a balance with time and money.
Maturity Stage: the established stage means your business has matured. You have grown your business with a steady and loyal customer base and have established yourself within your market.
If you are in the growth stage – chances are you are juggling multiple responsibilities. You know you have to invest in some support – but what to outsource? You might be asking yourself “Should I invest in an accountant or business development?” Truth is, having a strong financial foundation for your business is crucial to your business’ success. At this point in your business lifecycle, you might also qualify for certain tax breaks that you may not have known on your own. There might also be a need for additional funding from banks, grants, or even partnerships – and having proper financial statements, income statements, cash flow statements can give these institutions the proper look at the health of your business. And business development? Who better to sell your products and services than the one who’s the most passionate about them? You!
Take a moment to think about your business – what are you core competencies? Think about your each of your staff and identify their strengths, passions and skills. Core competencies are the strengths that your company has now. They can come from any combination of skills, technologies, processes or expertise developed as a result of experience.
Our next question for you is – are you making the most of core competencies? The idea of core competency is one of the most important business ideas that can help determine whether a business succeeds or fails. In our fiercely competitive market today, it is important to maintain a sense of uniqueness from your competition. Developing a USP (or Unique Selling Point) in business is what can set you apart from your competition. Imagine if you try to balance accounting, your daily bookkeeping, managing your staff, scheduling, marketing and sales on top of what you’re good at – that doesn’t leave a lot of time for you to focus on what the core of your business is about.
This applies to your staff as well – think of what each of your staff are passionate about and what they are good at doing. Are you giving them the opportunity to do what they love to do? Or are you having them do work that they don’t enjoy – all in the name of cost-savings or just to free up your plate? Do you have a receptionist that is also handling your bookkeeping, or an office manager who now has to handle sales on top of her responsibilities? When you are mindful of what your employees’ core competencies are, you can make the most of their skill – which benefits both you and your employee!
So think about your core competencies – and whether you’re making the most of your strengths. For functions that are not core to your business, sometimes it is a much smarter move to engage professionals who are passionate about what they do, who can use their core competencies to help you with your business.
Sometimes, a little knowledge can be dangerous. We see this in accounting and bookkeeping all the time. Quite often, a client will come to us in very desperate situations, seeking our help. They either tried doing their own bookkeeping or had hired someone who was not qualified to manage their books. This can be very dangerous. Before they came to us, one of our clients had to pay their CA Firm to redo the work that their bookkeeper had done – just imagine how much that invoice from the CA would have been!
When you hire someone who is not properly trained to handle your bookkeeping, there is a risk that they will make innocent mistakes that can lead to big surprises at the end of your operating year when you are filing your taxes. They might also miss important tax breaks that you may be qualified for. Keep in mind that this does not just apply to outsourced bookkeepers, but also to people within your company who are doing company accounts on the side!
So when you decide that you need to outsource your accounting, make sure you do your due diligence to make sure they are qualified to handle such an important part of your business. At Five Star Accounting, accounting and bookkeeping is what we do best – our team is comprised of accounting professionals with many years of experience that are professionally-trained and certified to handle your business’ needs. We are committed to providing the best service to all our clients – you can rest assured that your needs are being met – the first time around. Contact us today for more information.