What’s Next When Your Business Grows Beyond a Start-Up?

Vigorous work is necessary to build a small business. When that tenacious effort pays off in a successful operation, you wonder what’s next for the enterprise. After achieving your maximum output, you can’t open the floodgates to new growth because your time is not unlimited. You need a plan that provides the foundation for a sustainable upward trajectory – one that addresses new opportunities to seize and the resources needed to do so.

When you move beyond the solo start-up phase, you already have some business history. You’ve proven that you have something to sell, and your experience delivering to customers gives you some financial data to measure performance.

Now you simply need a plan to judge expectations from new investment, whether from outside funding sources or by reinvesting some of your own profits.

Getting Started on a Business Plan

As the old expression goes, the best place to get started is the beginning. Summarize what your business has accomplished, where it stands regarding future prospects, and how you intend to achieve new goals. A business plan doesn’t need to become an unwieldy treatise. Rather, in a few sentences, you can state your market of customers, how much you have sold since starting, and the time and money that were required to attain those sales.

Describe the composition of your industry – whether it’s comprised of a few large organizations or is mostly numerous small enterprises. Convey whether the market is growing, shrinking, or stable. Do you expect your business to grow from an expanding market, or by attracting customers away from competitors?

Identify new products or services you intend to provide for the market, or simply give details about how you differentiate your business from the competition. What are your selling points to prospective customers? Explain how you attract customers, the amount of new business you seek over a specified future period, and the cost to accomplish that growth.

The Business Team

Growing organizations demand teamwork. Your business plan must convey who is focused on sales management, who manages delivery logistics, and who is tracking financial results. The latter may be outsourced to bookkeeping and accounting firms, but you need a system for timely examination and analysis of the financial reports produced.

Accounting professionals are also crucial to preparing the financial elements in your business plan. The capital and expense requirements necessary to attain your projected revenue are displayed in a cash flow forecast. In the future, this projection of cash flow will be compared with actual financial results compiled by your accounting pros.

Accountants, however, do not create the financial features in your business plan out of whole cloth. Your input is essential.

Only you know what your team can achieve with the available resources of money and time. You have the track record. You developed the product or service. You know the selling process. You know the risks and the ratio of costs to revenue.

The key factor moving forward is establishing strategic objectives that can be accomplished with a given amount of funds in a given amount of time.

Direct Costs Should Directly Affect Pricing Strategy

Entrepreneurs experience stark differences in costs among clients. The old 80/20 rule – that 20% of customers take up 80% of your time – may be an exaggeration, but it should not be ignored. It is integral to several factors that should be taken into consideration when developing your pricing strategy. Properly weighing and tracking each of these elements is essential to getting paid for every minute of work you do.

First, be sure to account for all costs directly associated with specific projects, to recapture them in client billing. Your fees should be high enough to recoup all costs for every single client. Don’t forget supplies, postage, and credit card fees, as well as travel costs, including local travel using your own vehicle.

A second, less obvious element is the time spent with a prospect identifying the scope of work and providing a cost estimate. Although this time is freely given until the engagement is agreed upon, you do want your fee to ultimately cover this time. Also, frequently overlooked is time spent researching and thinking about the optimal approach to a job. Projects of greater complexity call for greater fees.

Last, but certainly not least, is the overall mental anguish with which some clients burden you. These clients are the people who alter their demands after the project commences. They fill your inbox with new information and continual status update requests. By tracking client time history, you will uncover true cost.

By appropriately considering each of these aspects, you can bill accordingly and assure optimal earnings from each client.