Entrepreneurship is hard. It’s never going to be an easy road. Whether you’re in the infant stages of building a business or in the midst of sustaining one, it’s essential to understand the evolving role of entrepreneurship. Entrepreneurship changes overtime just as an entrepreneur’s business changes overtime. Here’s a look at the entrepreneurial journey and the five phases of entrepreneurship:
Phase one: The leap
No matter how you started down the road to entrepreneurship – with investments, seed money or dollars pulled from savings – there will always be a certain level of risk involved. And that risk is tied to everything you’ve likely walked away from – job security, financial stability, employer matching programs and comprehensive benefits packages. The risk is high but it’s worth pursuing your vision, rather than the vision of someone else. The start of entrepreneurship begins here, when your desire to be your own boss and in control of your own destiny outweighs the desire for financial security.
Phase two: Growth
Once the initial leap has been made into entrepreneurship, focus shifts toward a growth mentality. The entrepreneurial mindset becomes focused on hiring employees, investing into added resources and technology, securing office space and establishing the legitimacy of the business. Putting those foundational and operational pieces in place secures the legitimacy of the company, but entrepreneurs don’t stop at business establishment. The growth phase of entrepreneurship comes down to identifying new revenue streams and the most effective ways to grow business value.
Phase three: Reflection
As the business grows there will inevitably be a leveling-off stage. Some may call it business maturity, but it all boils down to the idea that all sustainable businesses reach a point where they shift to a maintenance mode. There is great value in this phase, but the time spent here needs to be used well. This stage in the entrepreneur journey is ideal for reflection.
Use this phase of entrepreneurship to identify successes, expose pitfalls and evaluate errors made and how they can be prevented going forward. The reflection phase is valuable and necessary, and should conducted as an annual business evaluation. Evaluate the state of your business against the state of the current economy. Determine how to adapt to customer and industry expectations. Identify the diversifications needed for growth. Most importantly, gauge how the business is aligning to its vision.
Phase four: Stabilization
The stabilization phase of business deserves a high-five; it marks a level of business maturity not all entrepreneurs achieve. Your business is now at a point where its proven to be sustainable overtime. Know this is the phase of entrepreneurship where – consciously or subconsciously – calculated risks begin to tapper off. The business is established, performing well and generating profit. The natural response from first-generation entrepreneurs is to maintain stabilization rather than pursuing avenues of growth. Keeping business stable isn’t a bad thing, but don’t let the fear bury your curiosity, creativity and innovation.
Phase five: The exit
A natural phase of entrepreneurship is contemplating an exit strategy. Whatever the motivation may be, this phase is difficult, complex and comes attached with many emotions and personal feelings. Whether the decision is made to sell internally or externally, entrepreneurs have trouble with the idea of finding someone who could fulfill their role and run their business effectively. It’s almost impossible for many to imagine finding an individual capable of nurturing the business as well as they have. And rightfully so. Handing over a business created from the ground up is like handing over a child; the entrepreneur and business are intricately connected. But it’s important to recognize that turning the business over doesn’t mean finding your carbon-copy; it’s about finding someone equipped, passionate and intelligent enough to carry the business forward.