#7 Stages of Solopreneurs Typical Growth Story
Free Book Preview: Brand Renegades
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Everything on this planet starts from a point. And so does a solopreneur's journey. This unique journey makes them special because they initiated it, unlike many others who just dream of it. It certainly involves its shares of risks but also increases their chances of hitting big.
Solopreneurs, who are they? He/she could be anyone helping others with social media management over the weekend or someone else who designs Chat bots late in the night. Each solopreneur journey is different than the other. Usually, people conceive small businesses and solopreneurs as the same kind of entities. But unfortunately or fortunately the hindrances a solopreneur faces are much different from that of a small business. To be very honest though, a solopreneur journey merges with that of a small business with progress and time. It’s an obvious part of development or improvement in that crucial journey.
A solopreneur journey follows this typical growth chart.
Understanding this step-wise chart would help one maximize scopes and plan things in advance.
It’s the baby or the nascent stage of the journey. It certainly includes a lot of soul searching and frustrating binge nights but also helps define a clear idea about the business. You have just started out and are filled with determination and energy. But the lack of funds and faith in the expertise of others, makes you take up too many hats at the same time. One tends to micro/manage all the aspects of their business simultaneously. You are doing client relationships, poster designs, website designs & marketing as a solopreneur. Time management becomes a major concern and can frustrate you severely.
The biggest mistake you can do in this phase is, missing out on generating enough cash to sustain your new business. You should be bringing in anything between 0- 100K a year.
You can measure how successful you are in this phase by re-evaluating how effectively you are managing your time. Also, make sure that you are enjoying the fruits of your new found venture.
Your finances and accounting are easy to manage and you need to focus mainly on your tax filings (quarterly sales tax and yearly personal taxes)
It’s only after you work with yourself in the market for a while, you see it more clearly. Chances are you need expertise in things that you aren’t master in. Or you want to expand the services you are offering in order to grow. You bring in a partner or someone whose ideologies work in line with you. This certainly reduces the pressure from you, as there’s someone else now sharing the same burden. You will gradually hire 2-3 more teammates who will take up the added responsibilities of the business. You will be bringing something in between 100-300K a year.
This could backfire badly if the partner doesn’t complement the services you offer. It is a bad idea to have someone on board if they do not play on the existing weaknesses. This could be an added stress for your already struggling venture.
You can measure your success in this stage by the improved efficiency of your operations compared to when you were a solopreneur. Your financial will still be in your personal control and you will be able to handle it on your own like in the first stage.
3. Full-fledged operations
You have a team of 4-10 employees that are working with you to bring in something between $300K-$1 million in yearly revenue. Your operations are in line right now and you have more defined and concrete ideas about what you want. Most other aspects of your business like operations and finances are taken care of right now. The next smart thing to do in this phase is marketing. This marketing, however, has to be very targeted if you want better results. You are in that stage of your business where you know who your target customer is. But at this stage, you can’t afford to spend hard-earned revenue on marketing that doesn’t bring in business.
While trying to attract new customers make sure you do not ignore the old ones.
Remember that converting an old satisfied customer is cheaper than acquiring a new customer.
Measure your success in this stage by calculating the profits you make. Make sure you check the results of your marketing campaigns to boost your productivity. At this point you will need to invest higher amount of efforts in managing your regular financial transactions, maintaining books and you will need at least one professional accountant in your team for book keeping, invoices, bank records etc.
4. Successful Businessman
You are a known entity right now in the market and people in your local geography you’re your business and know you as a successful businessman/business woman. You started alone and are working with a team of 11-25 employees earning between $1-$5 million a year. It is certainly commendable; you were an aspiring millionaire until now. What next? Set the vision that will take you further.
This is the phase where you have to let other responsible people in your business take responsibility for different aspects of the business. This is certainly scary but it is important for you to have the time to focus on other new aspects of the business. Even though it’s not possible for you to take each small and big decisions now. Hiring the right people would ensure that these decisions are in line with your goals.
As mentioned earlier, you have become relatively famous with your business now. It’s when other beginners look up to you. Giving back to the community states the clear hold you have of the industry. At this point, you would need an external financial auditor to review your accounting and make sure it is working fine. In most of the countries it is mandatory as well.
5. Established Organization
You and your partner have been successful in laying the right foundation and successful vision for your business. The business brings in something between $5-$20 million annually and has 25-100 employees.
At this stage, the complexity in management layers will increase significantly. It important for you to check that the vision you stated is maintained even in such complexities. Having a strong work culture is a smart way of keeping the spirit of the vision active. You will certainly need a team of HR personnel to take care of hiring, firing, growth, maintaining a systematic working culture in your organization and to ensure that an environment of mutual respect, adhering to core values and loyalty is maintained, for the vision to grow. You can still be okay with the external auditor services till this stage.
6. Mature Company
You have 100+ employees working with you now. You all are bringing in $100-$200 million annually.
You are growing in this phase and competing with other big names in the market. This phase is all about the timely planning of strategies and measuring their effectiveness. You check if the results were up to the mark or evaluate them and change them. The main goal at this stage is not to allow your growth to stagnate. A unique and focused strategy along with the strong company culture will ensure steady growth. The tasks like marketing, logistics, sales etc would need to segregated in departments with a department head and each department working on it’s only deliverables, cash flow, profit and losses. If it is not too needed, you can still sustain with the external financial auditor.
This is the dream come true phase, the phase for which you started. You are now one of the big names in the market, a tough competition for your competitors or a thought leader with others aspiring to be like you/business. Companies look up to you as a benchmark for innovation and growth. You along with your 200-500 employees are successfully bringing in $40-$100 Million annually now. At this stage, you may or may not choose to have direct control over your business. Choosing the right leader will ensure your vision is maintained regardless of your controlling stake. You will have department heads like CEO, COO etc and yes CFO as well as your finance has to be led by a dedicated department with an in house auditor and a CFO.
Success comes in different packages, small and big! What’s important is, how strongly you keep moving up after each time you fall back.