Every business is on a journey. Some journeys end up being much shorter than anyone would like, while others can be long and rewarding in many respects. Taking stock of where your company is in its journey—also known as the business lifecycle—can help you fine-tune your strategic roadmap, take a detour if necessary, and keep zooming ahead to reach the company’s full potential.
What Are the Stages of the Business Lifecycle?
At RoseRyan, as we tailor our finance and accounting solutions to the unique needs of the companies we work with, we’ve identified four stages in the business lifecycle and the typical developments and needs companies undertake at each stage.
Launch: Companies that have managed to push past their initial introduction to the world are establishing their foundation. They need systems and processes in place that can put them on solid footing, and guidance as they make all sorts of decisions, from funding and managing resources to getting their financial operations established.
An outsourced accounting team can set up the company with a fully integrated tech stack, get the financial house in order, and put the company on the path toward producing credible, timely financial information for smart decision-making.
Usually not quite at the point of needing a full-time CFO, companies at this stage often do need CFO-level advice and support to advise them and act on their behalf when reaching out to investors and dealing with the board. A wrong strategic move at this stage can take a company wildly off-course and slow down its promising pace.
Scaling up: The challenges become complex as a company continues to hire and consider new strategies, and the accounting and finance demands grow. Companies at this stage are scaling up while also trying not to burn out. CFO expertise is vital at this stage to achieve this balance.
When a financial challenge comes up, a talent gap on the team opens up, or a strategic project needs additional skills for completion, companies at this stage need to know where to turn quickly. Outsourced finance pros can be a critical lifeline to keep everything steady within the core finance organization while everything is moving at a fast clip. They can address technical accounting issues, weave financial integrity into the company’s reporting structure, lead the company through its annual external audit, and more.
Go beyond: Here’s where transformative transactions are pursued and resources and skills are tested. Preparing as much as possible for the change ahead and knowing where to go when knowledge and experience are limited during this stage in your business lifecycle is a must.
There’s very little time to ramp up the team and streamline operations when the company is going after a big change, such as an IPO, a SPAC merger, or acquisition. Consider the due diligence that’s required with any one of these transactions, and the integration challenges of combining forces with another entity or transitioning to becoming a newly public company. Being ready requires inward assessments and changes to processes to be able to withstand increased scrutiny from investors, auditors and regulators, and to be SOX ready if going public.
Whenever possible for the before, during and after of these transactions, you can rely on experts who have led teams through similar experiences. They can bring best practices and practical advice straight to your team while also taking over some of the responsibilities that could overwhelm your already busy team.
Summit: Even if you reach the peak of your company’s latest strategic goal (i.e., you’re running a well-established public company), there is always more work to be done and other goals or adjustments to be made.
The increased complexity involved with a maturing company, new compliance requirements, and unforeseen circumstances can lead to the need to make significant adjustments, such as restructuring, divesting a business unit, or conducting a spin-off.
Making the right decisions along every step may require a team of outside experts to get it done right, while the company resets itself and finds its footing again.
Understanding the Business Lifecycle Stages and Your Next Steps
Whether you’re at the beginning of the startup lifecycle or your company lifecycle stage involves heading toward the exit, the challenges you’re facing can put a tremendous strain on the team. At various times, you’ll realize you need to bring in outside skill sets, perhaps on a temporary basis.
Having helped more than 1,000 clients over the course of nearly 30 years, we have seen and done it all, and can help. For example: While a company about to go IPO may have few if any staffers who have gone through a similar experience, we have consultants who can step in and help the team catch up on what’s needed to prepare and get through the offering—and be a smooth-running company on the other side, fully ready for the new reporting requirements and expectations. That’s just one of many examples of situations companies encounter as they make their way through the business lifecycle stages.
Need support as you navigate your company through the business lifecycle? Find out how RoseRyan helps companies across the lifecycle and how we can guide your company to greatness.