Bankrupt...without ever seeing it coming15th May 2019
Pop quiz: When you build your business, at which point are you most likely to go bankrupt……..without ever seeing it coming?
Of course, as a seasoned entrepreneur who labours in the trenches every day, you know that there are financial risks at every stage.
When you are just starting out, money is tight and you do most jobs yourself to keep costs low. We call this stage “infancy.” You serve as CEO, bookkeeper, salesman, office manager and assistant.
Need a coffee run? That’s on you.
While this phase is certainly exhausting, it can also be exhilarating. Many entrepreneurs refer to it as their favourite stage of business-building, because they are doing work they love and any small wins feel BIG.
Next, if all goes according to plan, you advance to the middle, growth stage of entrepreneurship – what we call “adolescence”.
Your business is blossoming. New clients are hopping on board and turnover hits £1 million or £2 million.
All at once, there is too much work for just you and your small team. But since there is more money coming in, you can find more staff to help you scale, as well as the equipment, resources, and additional space you have long needed. You might also seek investment.
Finally, you reach the holy grail: The third, “mature” stage of entrepreneurship.
You’ve got the right people in the right positions. Your business is still growing incrementally, but on the whole, all is running smoothly. Now, you can take a step back from the day-to-day work, and focus on your company’s long-term strategy… or make your exit plans.
Congratulations, you are a captain of industry!
Unless, of course, you went bankrupt during one of these phases….
Can you guess at which phase of business – infancy, adolescence or maturity – businesses are most likely to run out of money, without ever seeing it coming? (And can you explain why this common phenomenon happens?)
Go ahead, take a stab at it. Click “reply” and let me know what you think!