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From Early Days, to Growth, and Exit: An Entrepreneur's Guide to Seeking Success
Helpful things to consider as you build and evolve your company.
One thing tried-and-tested entrepreneurs almost always learn is that no matter what stage your company is in, it's always time to plan. While plans don't always unfold as expected, success rarely happens by mistake. Successful entrepreneurs are those who strategize for their startup years, have a vision for growth, and know which steps to take when it comes time to exit the business and secure their legacy.
So, whether you're just starting out or you're already well on your way as a business owner, you need to plan for things like funding, how to scale, building value for investors, mitigating taxes, how to give back to your community, and how to move on. That's a lot to strategize but each is a critical piece to your overall success as an entrepreneur.
Here are three important areas to think about during your growth journey.
Early days: Build a solid foundation.
For a company founder, there is no such thing as "too early to plan." One of the best ways to get started is by assembling a team of savvy business and finance professionals, a strong support system from friends and family members, who can help set you on a path toward success. No matter how smart and ambitious you are, even the most accomplished entrepreneurs don't know or do everything all by themselves.
The team you recruit should include people who understand your vision for the business as well as your life goals. They will ideally come with different perspectives to help define your business structure and strategize for things like raising startup funds, liquidity, and much more to get you off on the right foot.
It's important not to forget about personal finance in these early days. While in startup mode, entrepreneurs might think that all their money is tied up in the business and there's no way they can spare another penny. But business owners shouldn't wait too long to begin growing their wealth or it might be too late to create the legacy you want for yourself and your loved ones.
You'll need someone on your team who can help you see your entire financial picture across 401(K), IRA, cash, equity, stocks, etc., and give you a pulse on current events—topics like tax code and relevant legislation—so you don't feel like you're on your own.
Growth: Be ready for opportunities that develop quickly.
There's no "set it and forget it" strategy for your business. As your business grows and you navigate rounds of financing, things like tax processes and employee compensation and benefits might need to be adjusted. You and your team will need an approach that is agile and responsive while adhering to your long-term vision.
This is why establishing a governance plan that outlines your business' structure and processes for decision making—starting with you and your managers—is so important. Knowing who decides what and when will help you be better accountable to your workforce, suppliers, partners, and customers.
"As you seek to raise capital and plot your way through the markets, having a plan that accounts for your entire journey will be something you rely on time and time again," says Carl Stegman, SVP Private Company Practice Lead at Fidelity.
During this growth phase, many entrepreneurs review their philanthropic ambitions—both as an individual and for their business. Charitable giving can help you create your philanthropic footprint. It offers the chance to show leadership, expand your networks, build awareness of your brand, and add value to organizations you care about.
"Entrepreneurs and founders have a really unique approach to giving back that is often reflective of how they built their business. They're ready to roll up their sleeves and build deep relationships through giving and volunteering," says Margot Navins, Vice President of Corporate and Executive Giving at Fidelity Charitable®. "That's why entrepreneurs are giving four times more to charity than other donors—their values and passion are driving everything they do, from their business to their philanthropy."
Exit: How will you cement your legacy?
While you're busy building and growing your company, it can be difficult to stop and plan your exit strategy. Or even imagine the day you won't be connected to your business. But the earlier you get started, the more you will be prepared—personally and financially.
There are typically three common exit scenarios: sale of the founders' share to another person or company, acquisition by another company or an Initial Public Offering (IPO).
A lot of consideration goes into deciding which avenue is best for you. For instance, if the business has potential for high growth and systems are in place to scale, then perhaps an IPO is your option. By offering stock in your business to the public, your business can raise funds that it needs to grow at a scale that wouldn't be possible otherwise. An IPO puts a lot of attention on your brand and hopefully a windfall of new customers follows.
On the flip side, an owner might want to sell or give their share of the company to a family member—effectively handing the baton to the next generation, giving them their opportunity to define the future course of the business and to take ownership of the legacy.
No matter where you are in your journey, be sure to get good advice. You will have to think on your feet often. Find the right team who can guide and support you in areas where you are not the expert.
Click here to find out how the team at Fidelity can help you grow your business and achieve the success that fuels your passion.
The "From Early Days, to Growth, and Exit: An Entrepreneur's Guide to Seeking Success" is reprinted from Entrepreneur, September 2022, as part of a paid advertisement by Fidelity Stock Plan Services, LLC. The statements and opinions expressed in this article are based on insights provided by Fidelity but modified by the Entrepreneur Partner Studio. Fidelity Stock Plan Services, LLC cannot guarantee the accuracy or completeness of those modifications.
Information is provided for educational purposes only.
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