What Is The Lifecycle?
A lifecycle is the series of stages every business transitions through during a lifetime. Elgee Rehfeld helps clients navigate through each stage as the economy, business model, or age forces changes. We can begin working with a new client in whatever stage of the lifecycle they are in. Often, an organization outgrows their current accounting CPA firm as their business evolves. The expertise of their current accountant was enough to get their basic tax, accounting, and reporting done, but now the stakes are higher.
What Stage Are You In?
Typically, we define the lifecycle into four stages:
- Emerging. Generally, this is short-lived. Either the organization makes it to the Growth stage or they go out of business.
- Growth. This stage can last for decades and a focal point is adding more systems, people, and processes, which does not occur in the Emerging stage. One could argue that growth never ends, but at one-point growth stabilizes and often converts to the next stage, which is Maturity.
- Maturity. In this phase, a business is a stable, profitable company. Growth is still occurring but at a slower rate. This phase is often referred to as a cash-cow.
- Transition. Eventually, a business hits a point where they elect to sell or transition to family. How old the owner(s) are and how much time the company needs to prepare for the sale or succession can vary widely.
Transitioning Through Lifecycle Stages
We start by understanding your goals and obstacles. If a client is in the Mature stage and in a family run business, the need may be to transfer leadership to the next generation and gift or transfer equity or personal assets to family members. If the goal is to sell to a third party, the owner may need to take other steps to get the business ready to sell at the highest price possible. Tax planning is a major step in either scenario. If a client is still in the Growth stage, there are different considerations to address.
Let Us Help
Wherever you are in the lifecycle, we can help. Our first step with you will be to listen to your needs, evaluate your current financial position, and then design a plan of action to move you successfully through your lifecycle.