Archives for January 10, 2023

The 5 Stages of Business Growth

Growing a business is a journey that starts with a single idea and can end with a successful exit. Along the way, there are certain milestones that a business generally goes through to reach an eventual exit.

I like to talk about these milestones as 5 stages of business growth.

1. Proof of Concept

The first stage of business growth is proof of concept. This is when you are just starting out and trying to prove that your product or service is something that people actually want to buy. At this stage, you may only have a few initial sales, like your first 20-50 sales.

The key objective at this stage is to focus on getting some initial traction and proving that there is a market for what you are offering.

2. Consistent Sales

Once you have proven that there is a market for your product or service, the next stage of business growth is achieving consistent sales. This means building systems and processes that allow you to make consistent sales on a regular basis. This could include things like setting up automated marketing campaigns, streamlining your sales process, having properly documented processes, and hiring additional staff to help with the workload.

As part of this phase, you ideally should begin removing yourself from the day to day operations as much as you can if you are the business owner.

3. Scaling Your Growth

The third stage of business growth is scaling your growth. This means expanding your business in a way that allows you to reach more customers and increase your revenue. This could involve expanding your existing marketing channels, entering new markets, acquiring other companies, or adding new revenue streams such as licensing or cloning your business model in different niches.

If you haven’t already done so, by this phase you should have removed yourself from most of the day to day operations if you are the business owner. It’s more difficult to scale your business if you are too deep in the trenches of the operations. At this stage, it is also important to start building relationships with other companies that may be interested in a future acquisition and to start putting intellectual property protections in place for your most valuable company assets if you haven’t already.

4. Preparing For Sale/Exit

The fourth stage of business growth is preparing for sale or exit. This means taking steps to make your business as attractive as possible to potential acquirers and ensuring that it will be valued at the highest multiple possible. This could involve things like streamlining operations even further, improving profitability, adding more recurring revenue, confirming that your most valuable intellectual property assets have been registered or properly protected, and making sure the systems you have in place can continue to run smoothly without you.

It is also important to start thinking about your desired exit strategy and tax savings strategy at this stage. For example, do you want to sell your company to a third party, or to your employees as part of an ESOP plan? How can you structure a large cash sale in a way that you can minimize the payment of income taxes on the sale?

5. Completing The Sale/Exit

The final stage of business growth is completing the sale or exit. This means successfully selling your business to a third party and realizing the fruits of all your hard work. This can be a complex and emotional process, so it is important to have a clear plan in place and to work with experienced advisors who can help guide you through the process.

There are various companies out there that can help you achieve these various stages of growth. At my consulting company, we primarily focus on helping companies go from stage 2 to stage 3 or from stage 3 to stage 4. If you are in one of those stages and would like my team to build you a free roadmap to show you our unique process from getting you to the next stage, you can book a free roadmap session here.

If you like the plan that we put together for you and want us to help you implement it, we’ll also tell you what that would look like. No pressure either way. We just want to help you grow to the next stage of business and continue reaching your goals.

By focusing on each of these milestones and continually striving to reach the next stage, you can increase your chances of building a successful and profitable business.

Frustrated With Your Staff Not Performing? Here’s What To Do Next

If you are having problems with a team member, it’s important to first identify whether the issue is a people problem or a process problem. Often times, what we perceive as a problem with an individual may actually be a result of unclear processes or expectations. If this is the case, addressing the process problem can help the team member improve their performance in the future.

To determine whether the issue is a process problem, consider the following:

  • Was the task or expectation clearly communicated to the team member?
  • Were the necessary resources provided for the team member to complete the task?
  • Was the team member trained on how to perform the task or fulfill the expectation?
  • Was the team member given adequate support and guidance as needed?

If the answer to any of these questions is no, it’s possible that the problem is a process issue rather than a people issue. In this case, you can take steps to improve the process, such as providing clearer communication, training, and support to the team member and making sure you have clearly documented procedures. You can get more details about how to become a master at delegating in this article on effective delegation.

If, however, you have determined that the problem is not a “process problem” resulting from unclear processes or expectations, it may be that the team member simply isn’t the right fit for their position or needs additional training.

Some signs that the problem may be a “people problem” include:

  • The team member consistently fails to meet expectations, even when given clear instructions and adequate resources.
  • The team member has a negative attitude or is resistant to feedback or change.
  • The team member is frequently absent or late or has poor time management skills.
  • The team member is frequently in conflict with other team members or lacks good interpersonal skills.
  • The team member does not take ownership of their work or shirks responsibilities.

If you are seeing any of these behaviors from a team member, it may be necessary to have a conversation with them to address the issue and find a solution.

It’s important to approach the situation with empathy and a desire to find a solution that works for both the team member and the team as a whole. By taking a collaborative approach and working together, you can overcome any challenges and improve the team’s overall performance. Sometimes the solution will be to provide different working conditions, more training, revised responsibilities, better clarification on their role, or to move them to a different role. Other times the solution may mean they are not a good fit for your company.

It’s worth noting that sometimes a problem with a team member may be a combination of both a people issue and a process issue. In this case, it’s important to take steps to address both issues in order to effectively resolve the problem.

The next time you are feeling frustrated with a team member, stop for a moment and ask yourself: “Is this a process problem or a people problem?” Then, you can refer back to the steps above for guidance on how to best resolve the issue for either or both of those scenarios.

Why “Screw It, I’ll Just Do It Myself” Is Not The Answer

As a business owner, it’s natural to want to take control and handle everything yourself. You may have a tendency to think that no one can do things as well as you can, and when you delegate tasks, you may not see the results you want right away. It’s easy to get frustrated and tempted to say “Screw it, I’ll do it myself” and take the project back instead of working through the process of training your team to be effective and take things off your plate.

But it’s important to remember that the only way to build a business that can grow without your daily involvement is to put the proper team and systems in place. Even if a team member doesn’t complete a project as well as you could, there is still enormous value in having them save you time. And as you continue to give them feedback and support, they will only get better and better at their job.

The goal is not to have every task completed perfectly the first time, but rather to build a team that can competently handle tasks without constant supervision. It may take some time and effort to get there, but the growth and freedom you’ll achieve as a result will be well worth it. The key is to learn to delegate effectively and let go of the need to control every aspect of your business. Remember, the only way to truly achieve the growth and freedom you’re seeking as a business owner is to get out of the way and let your team shine.

Here are some tips for effective delegation:

  • Clearly explain the project details and the result you are looking for. It’s important to provide as much context and direction as possible so that your team member knows exactly what is expected of them.
  • Set clear deadlines. This helps ensure that tasks are completed in a timely manner and also gives your team member a sense of responsibility and ownership over the project.
  • Provide the necessary resources. Make sure your team member has everything they need to complete the task, whether it’s access to certain software or information about the project.
  • Give some creative leeway. While it’s important to provide direction, it’s also important to allow your team members to use their own skills and expertise to complete tasks in their own way.
  • Establish clear communication channels. Set up regular check-ins to discuss progress and provide feedback. This will help ensure that everyone is on the same page and prevent any misunderstandings.
  • Follow up and give feedback. After a task is completed, take the time to review it and provide constructive feedback. This will help your team members improve and grow in their roles.
  • Point the team member to an existing policy or procedure they should follow if one exists, or ask them to create one if this is a task that will be repeated multiple times where one should be created.
  • Consider creating a keyboard shortcut or delegation template that you use to help fill out all the project details when you delegate to someone. This will help ensure that you don’t forget to include any important information.

If you follow these steps and feel like a particular team member still isn’t doing the job well, check out this article on handling staff performance issues for details on what else you should try next.

How to Reach Your Business and Personal Goals Automatically

Success rituals are a powerful tool for achieving your business and personal goals. They are simple, yet effective habits that can help you automatically reach your goals without much effort. A success ritual is simply a particular goal you want to achieve, tied to a ritual you perform regularly. This could be anything from exercising first thing in the morning to meditating right before bed. By tying your progress on a particular goal to a daily ritual, you can create a powerful habit that helps you achieve your goals automatically.

To get started with success rituals, it’s important to first identify your top personal and business goals. Take some time to brainstorm on three goals that are most important to you. These could be anything from increasing your sales to improving your fitness. Once you have your goals in mind, it’s time to brainstorm on some daily actions that will help you move closer to those goals. These could be things like making sales calls, going for a run, or working on a new project.

Now, it’s time to tie those actions to an existing routine or ritual. This could be something as simple as going for a run as soon as you wake up, or setting aside time for sales calls right after brushing your teeth. By tying your actions to an existing routine or ritual, you can create a powerful habit that helps you achieve your goals automatically.

Let’s say you have three goals for the new year: increasing your sales by 20%, writing a new book, and losing 20 pounds. To create success rituals around these goals, you might consider the following actions:

  • For your goal of increasing sales by 20%, you might decide to make sales calls every day at the same time, such as right after you finish your morning coffee. By tying this action to an existing routine, you can create a powerful habit that helps you automatically reach your goal.

  • For your goal of writing a new book, you might decide to work on your manuscript for 30 minutes or an hour each day. This could be first thing in the morning, after you finish your work day, or anytime that fits into your schedule. By setting aside dedicated time each day to work on your book, you can make progress on your goal without much effort. Over time, you’ll look up and have a finished manuscript draft.

  • For your goal of losing 20 pounds, you might decide to make healthy meals for the day after you get dressed in the morning. This could be as simple as preparing a batch of healthy lunches to take to work, or planning out your meals for the week. By tying this action to an existing routine, you can create a powerful habit that helps you automatically reach your weight loss goal.

By using success rituals to tie your goals to existing routines or habits, you can achieve your goals without much effort. So if you want to unlock your full potential and automatically reach your goals, consider incorporating success rituals into your daily routine.