While it’s possible to build wealth by working your way up the corporate ladder, there is only room for a few senior corporate officers. The rest either become middle managers, fail to make any progress at all, or simply shuttle from one corporation to another, staying at entry-level positions. Considering these odds, your probability of success will increase significantly by launching your own business.
As an entrepreneur, you’ll have the flexibility to work at your own hours, choosing to ramp up your efforts when your energy is at its highest and coast when it is at its lowest. Initially, when you start your business, it will seem like you’re putting in far more hours than you did when you were an employee; but, eventually, you’ll have plenty of spare time when the people you have trained begin to manage it.
3 Stages of Business Growth
The first stage in starting a business is finding a practical business idea, researching its feasibility, surveying your target audience, and then setting up and organizing your business; the second stage is finding the right people to be part of your startup team; and the third stage, of course, is getting down to business.
While stage one and three are often discussed in depth in business blogs, stage two is often skipped. Unfortunately, if you don’t do a good job at stage two, your business will not flourish. This may, in fact, be one primary reason why the failure rate of small businesses is so high. We’ll now take a closer look at how hiring an accounting firm, working with an experienced lawyer, and getting the help of a seasoned business mentor will prove invaluable to your business success.
Professional advice will help you make the right moves after you have launched your business. If you don’t know what you don’t know, then you will make expensive mistakes. While knowledge of business administration and marketing can be readily acquired through formal education backed up by self-education and experience, you also need access to highly specialized knowledge about money management, law, and business strategies.
An accountant will ensure that your business has healthy cash flow by keeping track of how money moves in and out of your business; assist you with payroll processes, verifying that tax codes and payments are handled properly; and organize all your financial information for your first tax filing.
A lawyer will help you with contracts, registering, licensing, and permits; assist you with selecting your business form (e.g. sole proprietorship or LLC), and offer guidance on complex legal issues related to multi-state business, interpreting state laws, and raising capital and arranging distributions. In addition, a lawyer will help you figure out your tax advantages and advise you on ways to protect your business from liability threats.
A mentor will help you run your business better, keeping you focused on what’s important and avoiding beginner mistakes. While you may have bright ideas and a theoretical understanding of business, they will fill in any gaps in your business knowledge and provide guidance based on their experiences. A mentor will provide you with operational shortcuts, access to influencers, and tips about invaluable resources. In short, you’ll be exposed to ideas that aren’t available in business books. Finding a business mentor is like getting a Sherpa guide to tip you off about the shortest route to scale the formidable terrain of Mount Everest.
A Chess Analogy
In chess, you need to master three stages: opening, middle, and end games. In the opening, you need to study ways to dominate the center of the board. In the middle game, you need to figure out how to get an unfair advantage over your opponent through tactical play; for instance, since a knight fork will target two of your opponent’s pieces, you will get a material advantage. Finally, in the end game, you will need to make small, well-calculated moves to create a checkmate.
How does this apply to business? In business, many people know how to come up with a good business idea, research it, and launch the business; unfortunately, since they don’t know how to play the middle game, they never get to the end game. Creating a core team of business professionals will help you figure out the best tactics to use to beat the competition. The end game, of course, is up to you: create a business legacy or opt for a highly lucrative exit strategy.