Monday, January 28, 2008

Stages of a Start Up – What the Entrepreneur Can Expect

Many of my clients have wanted to know what they can expect when starting a business in regards to cashflow, marketing, how to get referrals, and how long it all takes. So here's an article I wrote for about the Stages of a Start Up - What the Entrepreneur Can Expect.

When you were starting out in business, no one told you it would take two to four years to become an "overnight success", did they?

That's because no one really knows how much time it takes to become financially successful in a new business venture. It tends to be different for everyone, based on your skills as an entrepreneur, your start up budget, and your willingness to take risks.

Throughout the years I have noticed a distinct "start up path" with my coaching clients. It can be a rough pathway, at times a jungle, but getting there is half the fun. In this article, we are going to investigate the stages of a start up entrepreneur. We'll take a look at what a hypothetical entrepreneur can expect and what to watch out for. We'll examine some "what ifs" and lay out an entrepreneurial path that you may or may not chose to follow.

Year One – Getting Your Name Out There

At this stage you're an infant business owner. You're learning who you are; what you're good at. You're the person with the "big idea" and you begin to recognize that you might be able to make money at it.

You may decide to keep your "day job" for the first year to provide income while you're building the business. Learning to be patient is essential during this phase because you're likely doing a lot and not getting much in return in the way of income. But that's ok. You may need to save 6 to 12 months of living expenses to augment your income when you leave the safety net of your day job.

So you begin to experiment with company names. You investigate legal entities for your business, depending on whether you'll have partners or go it alone. You print your first business card. It's not the best example of a cohesive brand, but it will do for now. You use your cell phone as your business phone number. Your home computer becomes your business computer.

You begin to develop your 30 second commercial. It's a bit shaky, but it gets the point across. You start the networking circuit to build awareness. You want to hit the ground running and you're a little disappointed that the revenue doesn't roll in as fast as you thought.

You land a few clients. You're elated, but it wears off quickly. You keep going. You're undercharging and working long hours, but you may not recognize it at this point. How can someone who works so much make so little? Oh well, you keep going.

Year Two – Growing the Garden

At this stage you've grown up a little to become a teenager business owner. You're getting better at what you do and the word is getting out. You're still working like mad, but it's all starting to make sense.

You recognize that you'll need a better Brand if you're going to attract better clients, so if you're smart you hire a professional designer and do a brand overhaul. You re-work your 30 second commercial and it starts to sound more like you. You come up with a great benefit driven tagline and excellent copy to market yourself. You redesign your website and re-create your marketing materials based on your newfound knowledge and you get out there again to sell yourself.

When it’s time to get a paycheck, you'll need to determine a reasonable salary for someone in a similar position. Don't get greedy though. Keep your lifestyle modest with an eye to the future. You are building a business empire but you'll need to reinvest your profits for quite some time.

You begin to realize that growing your business is a bit like being a gardener. You're building relationships that plant seeds which grow into vines. In time, flowers on the vines will bloom. Some vines may take longer to bloom than others and may need additional fertilizer and loving care. Eventually, though, many vines bloom with elaborate intricate flowers yielding strong business relationships that benefit your company for many years.

At the end of this stage you raise your fees which has a big impact on your profitability. You realize it's better to charge at the higher end of the market. You may lose a client or two, but you'll have more cash in the bank and more free time to enjoy your personal life.

Year Three – Becoming an Expert

Congratulations on becoming an adult business owner! Clients you worked with in year one and two are referring business to you. You realize how powerful referrals are and you work on developing a distinct referral strategy.

You've invested in additional education and certification in your field. This gives you credibility and allows you to be more selective in choosing your clients. You no longer have to take the clients that give you headaches and don’t pay their bills. People are coming to you with questions because they recognize that you have the expertise to provide the answers. Your close ratio has improved significantly because the referrals you receive are already pre-sold on your services. This means you don’t have to work as hard as you did in the past. You’ve got more time for yourself, more time to live your life.

By now you've built network of contacts and you've established yourself as an entrepreneur in the business community. The relationships you worked so hard to build are beginning to provide a return on investment. You've identified the networking groups that yield the best results, and you've let others fall by the wayside.

You're now making more revenue and you're excited about the possibilities you envisioned since day one. Suddenly there's more money for extras. The old worn out office desk has out lived out its usefulness and you begin to shop around for something more suitable. You decide to invest in new technology and systems that you'll need to be more efficient.

Year Four – Reaping the Rewards

You are now a mature business owner and a master-gardener. Your many vines have ripened with age and are producing hoards of beautiful blooms that reach geographical areas you never imagined. You need only to fertilize and water the vines occasionally to keep them healthy and happy.

By this time you have figured out how to take your company to the next level. You've created a virtual business and a team of experts to guide you: Employees or independent contractors, Attorneys, Accountants, Business Coaches, Mentors, Financial Advisors, Graphic Designers, Writers, and anyone else you may need to help build your wealth. You realize that you don't have to do everything yourself. There are others out there who specialize in what you need and they can easily be on your team. All you have to do ask them.

Business comes to you easily and frequently. You’ve developed a reputation as a specialist in a specific area by leveraging the power of niche marketing. Your referral partners know when to send you business. You receive new client inquires almost daily and you've learned to clone yourself and refer business to others on your team.

Your new business comes from referrals, the internet, and networking. You write about your specialty, you speak to groups with confidence, and you are well known in the community.


Your four-year "overnight success" was a long road to travel. You learned that you need the support of your spouse, friends, and family to get you through each start up phase. Going forward you may need the support of a coach or a mentor – someone to hold you accountable for your key success actions. This point is critical. It's focused action that gets results, not rhetoric or vision.

©Copyright 2007- Suzanne Muusers - All Rights Reserved

Reprint Rights: You may reprint this article as long the article is printed in its entirety including the about the author information, you leave all the links active, and you do not edit the article in any way, and include the copyright statement.

About the author
Suzanne Muusers is a Business Coach and Business Expert based in Scottsdale, Arizona and is the creator of The Two Page Mini Business Plan. She is a credentialed member of the International Coach Federation and works exclusively with entrepreneurs and financial advisors who want to leave behind their lives as business workers to become business owners earning six figures and above annually. Visit her site:

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