STAGE 2 - SURVIVAL
Yippee! Your business is still there. You have product or service which people wants to avail and are willing to pay for it.
But can you survive for the long term? In order to do that, you’ll need not only to sell some products/service but to sell enough of them at a high enough price to break even and start generating profits. That’s what this stage is about.
The key test now is to make a feasible and profiting business. Obviously, there will be ups and downs, great years and terrible years, but overall, the good needs to outweigh the bad.
Once you succeed at this stage, you’ll have a self-sustaining business. That gives you several wonderful opportunities:
The ability to work for yourself full-time, without stressing over to what extent you can continue doing it for.
The ability to start hiring other staff and providing a living to them as well.
The opportunity to meet and interface with new clients and with different entrepreneurs in your industry, and more.
This is the phase at which you move past your dreams and enters into the domain of concrete reality.
The actionable formula here is simple. Revenue has to be higher than costs. If it is, then you’ll be making a profit, and you’ll have successfully explored the survival stage. You’ll also need to pay close attention to your pricing, to ensure that you’re making enough of a margin on each sale to cover your costs. More information on that here:
Also be sure that you never fail to monitor your cash flow. Even if your business is making a profit, it’s always possible to run out of cash in case the revenue comes in later than the due bills. This happens all too often, so be sure to understand and manage the cash flow.
Upcoming Blog in the series - Stage 3 - SUCCESS