What are the common business milestones for the first 5 years?

by Corey Philip
December 2, 2019

The percentage of small businesses that don’t make it year by year increases. By the fifth year, half of all small businesses will have likely shut down because of various reasons. Some are out of the entrepreneurs’ control, but most of the time, it is.

Below are some of the most common business milestones to work towards within the first 5 years of your business. Consider them the key performance indicators or as the quantifiable cues of success and signs of progress. I also included some tips for how to achieve them.

Getting first client

Getting your first client is one of the first things that you should aim for. It’s the whole point of starting a business. If possible, you should actually be able to accomplish this within a year of doing business. The first client is a sign that there are people looking for your product or service and there’s probably a bigger market for it.

TIP: Establish a good marketing strategy and sales process.

While you don’t have a customer or client base yet is the perfect time to experiment with what marketing strategy works best. You should make it a recurring practice to refine your marketing strategy according to industry trends, season, and other factors. However, from your first client, try to establish a solid sales process that you will follow for all transactions thereafter.

Hiring your first employee

Hiring is always tricky, especially when it’s your first time. Aside from that, taking on a new person to work on the business is another weight and pressure to succeed. That’s another person’s livelihood that relies on the business.

However, being capable to do that is a big business milestone. It also means that your business is getting big enough that you won’t be able to handle everything on your own anymore and that it earns enough to pay another person to do the job.

TIP: Be prepared to train new people.

I’m not the type to believe in resumes and interviews. The surest way to form a team is to build people from the ground up. If they have previous experience and some level of knowledge related to your line of work, then it just comes as a bonus.

Moving to an office

Achieving milestones in this list are indicative of having enough earnings from sales and that you’ve created a profitable business. However, moving to an office is a different kind of significant upgrade because it takes out such a big expense as well.

TIP: Have a scalable marketing and sales strategy.

So, how does this relate to moving to an office? First, having a scalable marketing and sales strategy means increasing earnings while the costs to carry out marketing and sales strategies are maintained to a minimum.

This follows that the costs of moving to an office shouldn’t hurt your budget overall because this move has become a necessity. If you’re capable to do it, it means your earnings are able to cover it without taking so much away from your entire profit.

Making it past the 3 year mark

Third time’s a charm, good things come in threes, the rule of three. There’s something about the number 3 and this may just be some comical voodoo, but in business, when you surpass 3 years, it most likely means the business is pretty solid.

TIP: Commit.

In big business management, executive commitment is necessary for the company to succeed. It sets an example for the kind of commitment employees should also embody. When you decide to start a business, be ready for the reality that it may take up the majority of your life for the next few years.

Implementing management

As business grows, you won’t be able to handle everything on your own, and you shouldn’t. You should allow employees to take up leadership roles and implement a management system to operate your business cohesively from within.

TIP: Set up and follow through good business management processes.

Make sure to include these practices into your regular schedule or on a consistent recurrence: meetings, a reward system, tactics and games to improve company culture, among other things.

Taking a few week vacation with no worry about the business

The ultimate goal for any entrepreneur should be to build a business independently so that it wouldn’t need them to be present all the time to be able to function. You’ll know you’ve achieved this when you can take a few weeks of vacation without worry that the business will stop or fall apart.

TIP: Automate and delegate.

You can now automate a lot of business processes. For example, you can automate emails so that they send when a trigger is set off. The most important thing that you shouldn’t miss is that you should be able to track the information and data.

As for things that you can’t automate, you can delegate. Some entrepreneurs make the mistake of not trying to delegate tasks because they’d rather do them on their own. That may work for some time but eventually, your business’ longevity will depend on your ability to let other people take the lead in some aspects.

Referrals and repeat customers become more than 50% of revenue

Referrals and repeat customers are a good sign that your business is heading in the right direction. There’s a reason customers remain loyal, mostly because of your good product or customer service. If you can keep old customers continuously satisfied, you’ll likely not run out of business.

TIP: Double up your efforts for customer retention.

Customer retention is actually the better option than customer acquisition. Past customers are more likely to buy from you than new customers. It also takes less time and effort, especially if they’ve already had a good experience with your company.


The first 5 years of a business are the most crucial. At the same time, if you’ve surpassed the mark, you’re already part of the 50 percent of business owners who make it past that. If you do, it’s also possible that the hardest times of being an owner of that business are behind you.

It will be just a matter of improving whatever information and experience you’ve gathered from the first 5 years into the next 5 years. If you’re at a loss for how to measure your progress, take reference from these milestones and assign personal deadlines for them.

About the author

Corey Philip

Corey Philip is a small business owner / investor with a focus on home service businesses.

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