Assessing Your Business Owner Journey: Navigating Business Transitions for Success

“If you don’t know where you are going, you’ll end up someplace else.” Yogi Berra’s sage advice rings especially true in the complex world of business ownership. The journey through its many stages can be as daunting as it is rewarding, with each phase brimming with unique challenges and opportunities. While we’ve simplified these stages for clarity—from the initial launch to the strategic exit—it’s important to remember that the journey of business ownership is seldom straight.

As you steer through these transitions, just like mapping out a long road trip, the importance of knowing your current location and the direction of your journey cannot be overstated. Have you pinpointed where you stand today? Can you envision the destination you’re striving for? Understanding your current position and having a clear vision of your end goal are critical. As you read over this blog, note that these stages serve as your compass, guiding you through the path of business ownership and helping you navigate what lies ahead confidently. Ask yourself these two essential questions throughout your readthrough – Where are you on this path? And, more importantly, where do you want to go? Let’s dive in and chart your course.

Stage 1: The Countdown – Planning, Prep and Formation

What does stage one look like? If you’re at this point, you’ve decided it’s time to hang your own shingle and open your own business. Unless it was a decision thrust upon you at the last minute, you’ll take months to plan for your new venture. 

In this initial stage you’ll ask yourself the following questions: 

• Who will be your new customers? 
• How will you charge for your products or services?
• Have you sought out a business relationship with a CPA and attorney? Have you had discussions with those relations that will set up your business using the right structure? 

Stage 2: The Launch – Starting Strong

Stage two typically arrives when you are in the early years of business ownership, perhaps within the first three to six years. You’ve launched your business and begun your entrepreneurial journey. Priorities and goals are shifting from what they once were. 

The following statements describe the reality of being in stage two: 

• You’re focused on getting your business off the ground and establishing a foothold in the market—on bringing your vision to life. 
• Strategic planning has taken a backseat to more immediate concerns and your efforts are primarily tactical as you navigate day-to-day operations 
• You strive for survival and growth. You’re in the thick of it – putting out fires, wearing multiple hats, doing whatever it takes to make payroll. 

Stage 3: Gaining Ground – Building Momentum

Entrance to stage three is marked by your business gaining traction. Unfortunately, 95% of business owners do not make it this far. Characteristics include: Your business is up and running; You are in the growth phase, usually three to seven years; Like your business your focus has expanded. 

Stage three business owners want to focus on growth, which may include the following:

• Expanding their business’s customer base
• Increasing revenue, and solidifying their position in the market. 
• Planning strategically  to scale your operations and capitalize on emerging opportunities. 
• Acting on growing demands of their dynamic business – As the business expands, so does the need for additional workforce to support increased production, sales, and service delivery.

Stage 4: Facing the Waves – Overcoming Challenges

Stage four will test your ability to innovate and adapt. At this stage, your business is mature and it’s encountering challenges and setbacks that test your foundation. You may be seeing a rise in economic downturns, changes in the competitive landscape, and internal issues of various sizes. 

If you’re located in stage four, you may find yourself agreeing with the following statements: 

• It is difficult to assess what processes are working, and what processes are no longer working under shifting circumstances and outdated methodologies. 
• With challenges on the rise, recovery from hardships is on the backburner with bigger and more complex waves hitting your shores. 
• Outside elements — a pandemic, family dynamics, or economic pressure – put your business’s resilience to the test. 

Stage 5: Eye on the Horizon – Maximizing Value – Created something valuable and ready to transition…

Stage five has arrived at your doorstep when you are thinking about the future of your business – you start to shift to legacy building. The future vision starts to take shape in your mind. You start to daydream about the boost to your personal bottom line and how you’ll spend your time. The end game starts to take shape.

Contemplations are on the rise in stage five, these include: 

• Contemplating what’s next for the company—possibly transitioning out of your business. 
• Contemplating what’s next for you – Whether you’re considering retirement, pursuing new opportunities, or planning for succession, 
• Contemplating your value – maximizing the value of your business becomes a top priority. 

Stage 6: Sunsetting – Searching for light at the End of the Tunnel and preparing to Sell 

Usually, 3-5 years before you are ready to transition, you arrive here at stage six. You’ll be focused on making sure your business is as attractive as possible to potential buyers or you are preparing to hand over the reins. 

Actions involved in the sunsetting process include: 

• Strategic planning that focuses on enhancing profitability, streamlining operations, and increasing market value to attract potential buyers or investors. 
• Taking actions to prepare for transition: Hiring your exit team, assessing value drivers, and eliminating deal killers. 
• Placing profit strategies such as tax strategies, and cost reduction strategies in motion. 

Stage 7: The Transition – Ready to Sell

Logistics play an important role in the final stage of the business owner’s journey. At this stage, You have initiated the process of putting your business up for sale. With the right buyer in mind, negotiations have begun. 

The selling stage prompts a business owner to do the following: 

• Engage or look to engage with exit teams, business brokers, and financial planners
• Conduct valuations and prepare documentation such as financial records and operational procedures
• Seek out potential buyers or investors and have logistic conversations about the transition process. 

Stage 8: The 17% Club: Closed the Deal! 

You’ve closed your sale, and joined the elite 17% club of business owners who have successfully sold their businesses. Contracts, due diligence, and smooth transitioning mark your presence at stage eight. If you’re here, you have a suitable buyer or investor, and you’re preparing to negotiate terms and finalize the sale of your business. You are at or just crossed the finish line! And, therefore, on the path to secure your financial future.

After closing the deal you’ll be met with the following: 

• A complex mix of legal and financial considerations, such as due diligence, contracts, and agreements. 
• An emotional roller coaster of change and a constant need for effective decision-making. 
• A newfound demand on time, which challenges all potential actions to become strategic and resourceful before being put in motion. 

Stage 9: What’s Next? – Charting New Horizons

With the business successfully transitioned, the question of ‘What’s next?’ looms large. For some, it might mean retirement or pursuing new hobbies. For others, it might be the thrill of starting anew. The entrepreneurial spirit is a flame that doesn’t easily extinguish. Possible avenues include exploring new ventures, consulting, or dedicating time to mentoring the next generation of entrepreneurs. 

Reflecting on Yogi Berra’s insightful words, “If you don’t know where you are going, you’ll end up someplace else,” underscores the essence of our journey through business ownership. It reminds us of the importance of having a clear direction and purpose at every stage. Assessing where you are on this path is not just an exercise in self-awareness but a strategic step in steering your business toward its ultimate destination.

How to Navigate Your Next Chapter 

So, where do you find yourself on this journey? Are you navigating the initial challenges of launch and growth, maximizing your business’s value for a future transition, or contemplating what adventures lie beyond the successful sale of your business? Perhaps you’re somewhere in between, pondering your next move.

Regardless of where you stand, remember that envisioning your end goal is crucial. Whether you’re just starting or ready to pass the torch, aligning your actions today with your aspirations for tomorrow is key. And if the path seems daunting, remember you don’t have to do it alone. Seeking expert guidance and peer support can illuminate your route, helping you make informed decisions that prepare you for what’s next and ensure a legacy you can be proud of.

As we chart our courses and embrace the complexity of this journey with purpose and preparation, we’re here to help you assess, plan, and execute each step toward your success, from launch to the 17% Club and onto the exciting possibilities that await beyond. What’s your next destination? Let us help you map out a path to get there, ensuring you don’t just end up somewhere else but exactly where you aim to be.

We’re here to help you execute relentlessly and navigate confidently toward your end goal so that you end up exactly where you want to be — successful, satisfied, and secure.