How Smart Financial Moves Create A Smoother Business Life Cycle


When the entrepreneurial spirit hits, the big-picture excitement of launching a business can cause the more mundane financial details of the endeavor to get shoved aside.

That can lead to significant consequences – mostly negative.

“It might seem easier to push anything related to taxes, accounting, and finance into a corner to deal with later, but the reality is that laying out these important building blocks can help pave the way for the creation of something sustainable,” says Rob Cordasco (, author of A Framework for Growth: Smart Financial and Tax Planning Strategies Throughout the Entrepreneurial Life Cycle.

“Not dealing with them, on the other hand, might cause a shaky foundation to crack. And it happens all the time. Among businesses that fail, 82 percent crash due to poor cash-flow management.” 

The business journey has four main phases – startup, growth, maturity, and exit, says Cordasco, who is also the founder of Cordasco & Company, P.C., a boutique Certified Public Accounting firm. 

“Each comes with specific organizational, financial, tax, and accounting needs,” he says. “Planning becomes critical to how you manage and navigate each of these life cycles.”  

  • Startup. One early decision entrepreneurs must make involves how they want to do business. “You can decide to be a corporation or a limited liability company (LLC),” Cordasco says. “Both of these make it so that your business is recognized in its legal existence.” An attorney can help in determining which would be best depending on specific goals and needs, he says, but generally, a corporation is more structured and rigid, while an LLC is more flexible. But a corporation can go public while an LLC can’t. They also have different tax implications.
  • Growth. Most entrepreneurs describe this stage as a wild ride, Cordasco says. A steep increase in sales often causes a good initial buzz; however, this stage also brings risks as the company faces new challenges and stretches to meet the high demand. “You’ll need an accounting system in place that is easy to operate and can scale with the company,” Cordasco says. “You’ll also want controls set up to track funds and be able to see where every dollar is going. Think of the downside of not being financially vigilant at this stage. Your top-line revenue could greatly increase, but if costs grow more, your company will end up losing money. Monthly meetings with your CPA and other advisors are critical during the growth stage.” 
  • Maturity. During the maturity phase, growth may continue to occur, but not typically with the rapidity of the earlier stage. Cordasco says this is a good time to fine-tune systems and processes that may have been stretched during the growth years. “From a tax perspective, larger numbers generally mean taxes will play a bigger role in the company’s financial well-being,” Cordasco says. “In this stage, you’ll want to revisit the entity structure of the company, as the previous years may have created the need for a legal change.” 
  • Exit. This phase can occur during any business life cycle, for various reasons, such as sale, retirement, or bankruptcy, Cordasco says. “For the entrepreneur, the exit phase is a time to think ahead for life after the venture,” he says. “For the company, an exit might take place as a merger, acquisition, or another type of buyout.” Depending on the present circumstances, a business owner may need to review trusts and estate plans, develop a succession plan, consider family obligations and goals, or scrutinize potential new ventures.                                                                                      

“Keep in mind as you go through the business life span that there is no one-size-fits-all solution,” Cordasco says. “Building a company doesn’t involve following a step-by-step guide that works for everyone. There is no playbook. The decisions you make and the exact approach you take will depend on your company’s needs and your personal preferences.”

About Rob Cordasco

Rob Cordasco (, author of A Framework for Growth: Smart Financial and Tax Planning Strategies Throughout the Entrepreneurial Life Cycle, is the founder of Cordasco & Company, P.C., a boutique Certified Public Accounting firm. Cordasco is a CPA with more than three decades of experience. He holds a bachelor’s degree in accounting from Spring Hill College in Alabama.

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