After a few tumultuous years following the Great Recession, start-ups are on the rise again, according to the latest Kauffman Startup Activity Index. Specifically, there has been a steady rise in the percent of the U.S. adult population that became entrepreneurs, on average, in a given month.1 To go along with this trend, the National Center for Education Statistics reports colleges and universities have also conferred more business degrees at the bachelor’s degree level than all other fields,2 likely cultivating the newest crop of entrepreneurs.
Starting a new business takes a lot of work, and it’s true that not all will survive even when owners have a business degree in hand. Failure is always lurking around the corner, but relax—it’s not inevitable. Understanding what to expect in the five stages of a business lifecycle will help all new bright-eyed entrepreneurs as they embark on this potentially lucrative journey.
Before you make it official, you need to formalize your concept and test the waters to see if your start-up can be successful.3 Get input from anyone you know, including family, friends, and colleagues, as well as those you don’t know who are familiar with the market and your target audience. You need to be confident in yourself and your idea before taking the plunge, and if you don’t like the feedback you’re getting from others, now is the time to rework your concept to make it work.
Congratulations—you’re a living, breathing start-up. Now it’s time to go into survival mode as you work incredibly hard to garner customers while producing and providing your product or service. And, you’re doing all of that while trying to conserve your cash flow. Malleability will be key during this stage as you consider the potential need for more infusions of funds or the tweaking of your business model, once again, now that you’re in-market.
Things are progressing well and you’re profitable, but that also means that competition can increase as a result of your achievement. You may need to revisit business plans and financing sources as well as hire more people and delegate responsibilities in order to keep up with the growth. Hiring professionals with experience that complements yours can allow you to focus on your role as head of the organization. ‡
You made it as a successful business. While things may start to seem routine, you get the itch as entrepreneurs often do and wonder what to do next. Do you expand into other markets? Do you add to your existing product and service line? Or, do you feel happy enough to keep chugging along indefinitely? Whatever you decide, don’t lose sight of the market and other external issues that can impact your business when you least expect it.
Not all businesses reach this stage and continue to be as successful as they once were. By this time market demand has likely shifted, so you have some serious thinking to do. Should you push for more growth or consider closing or selling due to increasing competition? Or, do you establish a succession and transition to exit so you can start something new? 3
Entrepreneurs need to be flexible and willing to adapt as the business grows. While one doesn’t necessarily need a business degree to start and run a successful new business, it can help. Having the right knowledge and skillsets, like that learned with a Bachelor of Science in Business Administration (BSBA) degree from Walden University, can help aspiring entrepreneurs. A BSBA provides background on fundamental business principles and practices that apply to both domestic and global environments, and the opportunity to solve real-world business problems and evaluate the application of technology as a strategy for competitive advantage. This gives budding business owners the chance to practice and learn before implementing their own concept.