Understanding Growth: The 5 Phases to Business Success
There are many reasons people start a business. Some of us want to be our own boss, some of us want to do what we love, or we might want to create a legacy to pass on to our children. And others are driven by a passion to empower and help people, even create jobs.
And there is no question that starting your own business can be scary and intimidating. In every case though when we start a business we intend to eventually reap the benefits of the effort we put into it.
The reality is that if your business makes you not sleep at night, takes up most of your time and has you feel stressed out and overwhelmed, then you don't own a business. You own a problem. Building a business is by no means a simple undertaking, but there is a process to business growth. And the better we can understand and follow the process, the sooner we don’t own a problem anymore, but a business.
Essentially every business must go through five phases of business growth before it can become a hands-off, profit-producing asset that you don't have to worry about.
Each developmental phase comes with its own challenges and opportunities and the faster you can overcome these challenges and take advantage of its opportunities, the faster you will be able to truly reap the benefits of your business.
Here they are...
Business Phase One – CREATION
During this first phase you are researching your niche, identify your business model and approach. You create a business plan that serves as the foundation for business growth and the eventually you launch your business.
This is an important step and business owners often don’t give it the time and diligence it deserves. This is especially true if there is fast growth right at the beginning.
Business Phase Two – DISORDER
This step is probably the most chaotic phase of your business. Your goal is to become cash-flow positive as fast as possible. This means investing in different marketing strategies to see which ones work. You need to grow and satisfy your customer base . And you need to identify and build relationships with your vendors and create strategic alliances with other businesses and professionals.
This is also a step in which a lot of startup businesses either fail or get stuck in for way too long. As business owner one of the most important things you need to do during this phase is to continue to set time aside to work on your business versus just in your business.
Business Phase Three – CONTROL
This phase is all about optimization of your operations and creating efficient and effective systems. You need to review and optimize your processes, start paying attention to critical performance metrics and, most importantly, start to delegate as much as you can. Ultimately you want to create a business that pretty much runs without you. This means that you start replacing yourself as much as possible in the daily operations.
Business Phase Four – PROSPERITY
The prosperity phase is where you establish yourself as a leader in your market niche. You continue to focus on business growth and making your systems more efficient. As a business owner you should be able to reap the benefits of your time and energy invested.
Business Phase Five – FREEDOM
The last phase of your business is for you to completely phase out of the day to day operations of your business. You focus on succession planning and developing high-quality leaders and managers for your business. Your involvement will be limited to work on creating partnerships and possible acquisitions.
Understanding these natural stages of business development and identifying where your business is at in the process is important so you, as the business owner, can focus on working on the right things. When you are still in phase one or two it is not the right time to focus too much on refining processes. Contemplating partnerships when your operations are not set up to do that might be exciting, but not really what you should be focusing on either. Take some time to identify where your business is at and what your true priorities are at this point.