You started your business and its been up and running for a few years. You've learned an enormous amount since writing the business plan. You look back and marvel at what you got right, and shake your head at what you got wrong. But mostly you feel relief and satisfaction that finally you've got a business on your hands.
Now is the time to step back for a moment, catch your breath and take stock. You know much more now than you did before. You have a real-world feel for the market, your competitors, and the day-to-day reality of your business. You need to consolidate and organize that learning, then feed it back into your business model and strategy. Otherwise sheer momentum and the press of daily events will cause you to miss necessary mid-course corrections.
With so much of your time and passion invested in the business, don't overlook the experiential ROI. Leverage what you've learned to improve and refine your business strategy and operations.
Second Stage can help give your business a tune-up that will improve efficiency, find new opportunities, identify under-performing elements, and re-energize your staff.
Your business plan isn't just they honey to attract funders and partners to pollinate your business and get it started. A business plan is a critical on-going management tool. It should be with you every single day, and you should have been consulting it on a regular basis as you make decisions. By year two, your working copy of the plan should be heavily marked up and annotated. Every element of the plan should be flagged as "right on," "not really," "off the mark," or "dead wrong."
A business plan that is tossed into a drawer and forgotten the day after you open your business is a wasted business plan.
Now is the time to revisit the plan and upgrade it to reflect your new understanding of the business, the changes in markets, technology and resources, and the inevitable changes in your own personal circumstances. If your business is to survive and prosper, it needs to continually adapt to change. Updating the business plan is the best way to stay strong and competitive.
Do you have some employees? Even one? Are you sure your 1099 contractors fit the IRS definition of independent contractors? From the moment you hire your first employee, you become subject to a bewildering array of laws and regulations, Federal, state and local.
The last few years have been a whirlwind of activity, putting out fires daily and barely having time to think. Now is the time to make sure you are in full compliance with employment laws. This is also a good time to validate your withholding and tax deposit processes.
Second Stage can provide a quick, thorough review of your HR practices to make sure you're not exposed to legal or tax risks.
Cash is the life blood of your business. Managing that cash: knowing how much you have, how much you are going to need, and how much you will have is perhaps the most important ongoing task of running your business.
Improving cash flow management is often important at this stage in the life-cycle of a business. Now is the time to get very disciplined and detailed about projecting and managing cash flow. You have a much better understanding of the cash needs of your business now, and you have a real feel for how customers pay and how long they take.
Cash management is not as straightforward as it may seem. For instance, how much cash do you have on hard right now? You could just jump online and look at today's balance in your bank account. But is that really cash available to you? Almost certainly not, since checks you've written haven't cleared yet, there are automatic deduction coming out tonight and you know you'll be taking a deposit to the bank tomorrow. And what about your accounts receivables? Your accounts payable? How should you treat them in determining your cash position and projecting your future cash flow? Second Stage can provide you with tools that make managing your cash easier and give you reliable guidance on how to use your cash and when it will be available. These tools can help you spot upcoming cash flow problems and act to avoid them.
Let's take a good, hard, detailed look at your financials. Chances are you know the Income Statement inside and out, but most likely you've pretty much ignored the Balance Sheet. You also should take a good look at your Cash Flow Statement, to get a solid feel for sources and uses of funds. Second Stage can help generate some real insights from your financial statements -- insights that most accountants, who are focused on tax issues, miss. You need to look at your financials and cash flows from a management and strategic perspective, not a once a year tax perspective.
In many ways this is the most important part of taking stock after a few years in business. A company culture emerges with as few as three staffers -- counting yourself. So even if the company consists of just you, a partner, and one other person, you've already started to create a distinctive company culture.
What's the feeling tone of the company? Are there unresolved tensions, divisions between "them" and "us" that interfere with communication and reduce efficiency? Or, equally worrisome in certain respects, is there an excessively exuberate, even manic, quality to work relationships? Is everyone exceptionally nice, avoiding conflict and protecting each other, reluctant to criticize, challenge others, or raise questions?
Small, even unseen, problems can push your company's culture in the wrong direction, reduce morale, limit productivity, and result in unexpected staff departures. Now is a good time to have an outsider come and give you a candid assessment of your leadership style, management skills, and the emerging company culture.
