The Four Stages of Business Growth

wood-outdoor-stairs-landscaping-steps-1Business is like a staircase which it’s best not to skip any steps.

One of the things that can put us squarely and repeatedly into what I call The Meantime is not understanding what stage of business we are at (or even that there are different stages of business). A classic blunder is for people to try and skip a stage. They are working a job and quit it to start their business hoping to land right in Stage Three when they’ve barely begun Stage One. And, the reality is that it takes a year and a half (at the very fastest) to three years to develop a solid business – and that’s with consistent focus. All due credit to my dear friend and colleague Mark Silver for introducing me to this idea. 

So, let’s look at the stage of business growth and see if we can’t find where you are.

Stage Four: Independence – At this level, you could go on vacation for six months and your business would still be making money for you. You likely have many people working for you and airtight systems in place.

Stage Three: Momentum – At this stage, you likely have a full time employee or two and your business is generating enough revenue that everyone is getting paid a fair amount. You are thriving. Your have a solid niche and business model. In momentum, there’s a firming up of your business just as plants get that woody growth that prepares them to bear fruit later.

Stage Two: Concentration – At this stage, you might be beginning to get some part time help but you’re only barely paying the bills in your business. You’re squeezing by and the money is up and down. You focus on your marketing and money comes in but then you focus on delivering your products and services and the business dries up. Back and forth. Feast and famine happens a lot here. But, at this point, you’ve figured out your niche and what your business is about. You’re getting the business model down and developing the systems you need. This phase is like the phase of rapid growth of a plant. There’s a lot of hard work and a lot of learning here.

Stage One: Creation – In stage one, you’re doing a lot of experimenting still. You don’t have a clearly defined niche yet. You likely have no help at at all with your business and you are absolutely not able to sustain yourself financially – you can’t make a living at this level. In creation, things are new. You’ve had the idea to start a business and are full of excitement. The seed germinates and begins to sprout. At this stage the plant is far too soft and flimsy to bear much weight. It’s very flexible but not that sturdy.

Which stage are you at?

The enormous payoff of knowing this is the dissolution of stress when you realize that you are precisely where you’re supposed to be (e.g. If you’re in stage one and confused why you’re not making a living, well… be confused no more! You aren’t supposed to be! You’re supposed to be sorting out your niche). 

 

About Tad

  • Good, concise description of the business journey! A couple things to add:

    Thing 1. This journey is true for each product/service you launch, not just one person as a solopreneur with one offering.

    For example, in my 7 years in business, I’ve been at Stage 3 and 4 most of the time, gratefully. (I was lucky to have stumbled upon a great niche in the beginning that happened to aligned with my passion & skills.)

    But 3 years ago, I started shifting from my proven offerings, to try some new offerings that felt more true to me, and again for *those* offerings I had to begin at Stage 1.

    Thing 2. In my opinion, Stage 4 is not necessarily where we all want to go… certainly not for many people in yours and my audience.

    It’s not even where *I* want to go.

    Gandhi’s admonition to be wary about “wealth without work” resonates deeply with me. I’ve been there — having lots of money from doing little work, and I’ve found it to be been profoundly unsettling and unfulfilling.

    On the other hand, when I realize that my life’s purpose is to serve, and that money is *not* a problem to be solved once and for all, but rather, it’s an exchange for honest work, which actually benefits our growth and happiness, then it’s about finding a just and happy balance between taking time off to recharge/renew and doing consistent work.

  • I love that. totally true about it happening on a product/service level as well as a business level. and amen about level 4.