Planning for the success of your business not only gives you a map of how to get to your target destination, it also gives you the hope of knowing exactly what you're shooting for. Check out these startup milestones to help you get your business into the stratosphere.
Six months after startup: You should be defining your processes, who your customers are, what your company does and how you beat the competition. "By six months, you should be able to handle your business operationally," says business strategist Robert W. Bradford, co-author of Simplified Strategic Planning. "Although, it may still be a bit rocky because you're working the kinks out."
Can you cut it as a second-mover?
Almost every market will sooner or later experience effective competition. But David BenDaniel, Cornell University's Johnson School Berens professor of entrepreneurship, says those most amenable to second-movers posses similar characteristics, such as:
. A first-mover who lacks a proprietary position. Strong patents or ownership of key distribution channels are typical elements of a good proprietary position.
. A flawed initial offering. A first-mover who spends heavily to introduce a product or service that disappoints customers leaves the door open for later innovators.
. High first-move costs due to past product development, marketing or other initiatives. BenDaniel says, "If there's an indication that they're spending an awful lot of money building the market and not necessarily profitably, maybe the second mover can come in with less money and piggyback on the marketing expense of the first guy
One year to 18 months after startup: Most new businesses will reach profitability at this point. You should at least be breaking even: Your spending to get new customers should equal the revenue they generate. Your operations should be smooth at this point, says Bradford, and "you should certainly understand what the key factors are in attaining and improving profitability by one year."
Three to five years after startup: At this point, you should be more effective and efficient in generating customers. You're continually improving what you're doing, and now it's important to evaluate your strategic growth plans. Ask yourself: How do we beat or avoid competition? How can we play the bigger game? Says Bradford, "This is one of those dangerous points where a lot of entrepreneurial businesses are comfortable, and they never move beyond where they are."
Six to 10 years after startup: Is your business on autopilot? Can you go on vacation and return to smooth sailing? Think about expanding geographically or into new products or markets--you may also be thinking about exit strategies and succession planning at this point. Adds Bradford, "That's the point where you say, 'I know how to make this work. Now I move to the next level.'"