Small business owners are better positioned for success when they understand the different stages of business. With this fundamental knowledge comes an awareness around what stage their business is actually in and the ability to navigate the transitions between the different stages of business. When you’re not aware of what stage your business is in, your focus likely isn’t where it should be. That can mean ignoring things you should be doing or jumping into things you’re not ready for yet.
The Four Stages of Business
There are various ways to group the stages of business. I’m going to describe them in four stages because it’s a simple and clean approach, beginning with the startup stage. Every business has been in this space, no matter how long ago it may have been. This is when you have an idea or see an opportunity and decide to pursue it. You’re building your business from the ground up. This stage requires research for your initial business plan and establishing your product or service offerings. You’ll need to answer some important questions regarding production, marketing, sales, and networking:
- How are you going to bring this to market?
- Who's your audience and how are you going to find them?
- What's your pitch, the story of your product?
You also have to establish that you have a viable concept on your hands. Some people start their business as a side hustle. Most startups are going to take whatever business comes their way to get things off the ground. Others will need to figure out where your initial funding coming from. There’s a multitude of places, from out of your own pocket to a Kickstarter campaign. Finally, you’re surrounding yourself with the right people to give guidance and feedback on the decisions you’re making at this stage.
Once you have a viable product or service, the next phase is growth. The goal should be to roll out your product or service to more markets and larger markets on a controlled basis so you stay within the parameters of how many products you can create or how many people you can serve in the short term. Use this time to become an expert and thought leader in your domain. You’ll get clarity on your brand identity and messaging as you fine-tune your ideal customer. You’re also building your team. It may be people you hire, outsource to, or consult for their expertise. They are all team members contributing to your business’s growth, no two ways about it.
Now that your brand identity is clear and you’re creating and honing your systems, you’re ready to scale. We’re talking about an intentional, rapid expansion of the concept you nailed down in the growth phase. Testing and establishing your product in your own market is often a smart place to start. You can have an incredibly successful business without ever going viral online. Connect to the people in your own area first. Use your online presence to support those connections rather than being driven by your online presence. As you develop a better understanding of what else your customers are looking for, you may be pulled down many different roads and have to make decisions about what direction you want to take your business. Scaling your business means expanding production and systems so you can serve more customers. You're also growing your team to support sales and production levels, adding a layer or sometimes layers of management to coordinate your systems as they become more complex, and bringing on more administrative support for the level of business you have.
A mature business has met the overall objectives and vision you set when you created your business. Things are running on autopilot. The systems are operational and they can handle current demand. They reach your customers, bring them through the sales process, and complete and support that sale. You have a good relationship with your customers, which brings in more customers. As the owner of the business, you have a leadership team in place to run the business and you’re focused on your role as CEO. You are looking at what is coming down the pipeline. Depending on your business, being in the mature stage may lead to business decline. In today’s market, if you’re not moving, you’re falling behind and other businesses are passing you by. Understand what level of innovation is required for your industry and how to respond to marketplace changes. This allows your mature business to continue to thrive in the mature stage.
Focusing on the Right Things at the Right Time
When I was a test kitchen home economist, I decided to pursue a product idea of my own. I came out of a Fortune 500 company where we had plenty of resources and funding available to us, so I thought I knew the “right” way to do it from my corporate experience. I had a good grasp on the process behind exhibiting at a food show for exposure to get a product on store shelves. Well, that’s not exactly how it went. I incurred the cost of producing a fruit-based salsa and packaging and labeling it without having even one sale to support that I had a viable product. I had the sales process and structure in place and I understood the marketing side, but I couldn’t spin all the plates or do things like distribution. I got way ahead of myself, jumping into the scaling stage before I knew if the market was interested in the product. That was a powerful lesson that leaves me with a few tips to pass along to other entrepreneurs.
- A realistic understanding of the stage of business you’re in helps you stay focused on what you need to be doing now.
- Find people who can speak into you about where you are in your business growth. They can walk with you when it’s time to transition from one stage of business to another.
- Don’t get ahead of yourself. If you get out of your space, don’t be afraid to go back into the stage of business where you need to be.
Your success level goes up when you’re focused on the work in your current stage of business. Like moving up a ladder, you've got to have the foundation of level one before you can move on to level two. It will serve you better and make your life easier when you’re focusing on the right things at the right time.
The Inflection Point Hub
I’ve partnered with Jeff Heyer-Jones, president of SparkEvolve, to create a peer advisory community focused on people in the growth stage of their business. That’s our sweet spot. We deliver a unique, robust package as a visionary and an integrator, as a coach and a consultant. We’re leveraging our cross-generational perspectives and extensive work with small business owners to bring our members exactly what they need to grow themselves and their businesses. Plus we bring in additional experts who understand what you need to be doing in your business at the stage it is at today.
We all need to have other people come alongside us and support us in the parts of the business where we are not strong. If you want to be part of a strong community of small business owners who are ready to take action to learn and grow together, The Inflection Point Hub™ is for you. Make this your year to have a defining moment, an inflection point, that significantly changes the trajectory and progress of your business. Apply today!