Business progression is something that I have to very quickly access when getting to know a potential customer. From my experience I can quickly identify the stage that someone is in with just a few questions. This is more of an art than a science, after all we are all unique individuals.
Each stage requires specific skills and services, and is based upon an assessment, with this I build a customized plan that meets the needs of the prospective customer. I have made an interesting observation and I wanted to share it. Hopefully, this will help small business owners identify their stage.
So what are the characteristics of each of the stages?
Stage 1 – Idea Stage
The Idea Stage takes place when someone has a lot of ideas, has started to learn about what to do to start a business, but has not executed the idea. There are no sales yet. At this stage you risk nothing and the reward is nothing. You are an observer.
Don’t let this offend you; all businesses or products start here until we gain the courage to make the jump. At this stage, we are weighing the opportunity vs. the cost. Is the security of a job worth staying put or are you so persuaded by this idea and the possibility of success that you are willing to take the risk?
There are all kinds of decisions that have to be made at this point. Many potential small business owners stop here because the task seems so monumental that to tackle it would be far more effort than they can personally invest.
Personally, I would say that if you are here and you know you cannot or will not make the necessary investment of time and money you should stop; you run the risk of wasting your time and everyone else’s. You have to be “all in” to go to the next step. Remember sometimes it just isn’t the right time. This doesn’t mean you put it off forever it just means right now it is not a good time. Use this time to get your ducks in order and keep formulating your ideas. You are likely to come up with an even better version of the first idea as a result.
I coach many businesses at this stage and have helped them go from idea formulation to all the little steps such as entity formation, accounting systems, registrations and best practices for them to use. It’s usually a fun and exciting time for everyone.
Stage 2 – New Start Up
The New Start Up stage takes place when someone has actually started to sell their wares or services. The market is being tested and so are their systems. The job itself is a challenge and requires thought. As a business owner your whole person is being tested and your gifts and talents are becoming very apparent. You can see what you are good at but you can also see what you are lacking in very quickly. If you are intuitive it becomes very obvious, but if you are not, your customers will notice and probably tell you. It’s painful sometimes to see your own weaknesses and this is a test that many people are incredibly challenged.
To get to this stage you had to endure many hours of learning and this is only the beginning.
As a startup, (also known as the DIY stage) business owners feel the most pressure to do all the accounting, marketing and administrative tasks themselves. I see this as detrimental to the business owner. There is no way we can do all this ourselves and the cost vs the benefit is rarely considered…not to mention lack of sleep and the possibility of a stress induced temper tantrum.
In this situation I would start to talk through all the benefits of getting some help. Help doesn’t always mean accounting, although it would usually relieve a lot of stress. The idea is to start moving towards having a business someone loves, a business someone didn’t know they needed until it was created (Steve Jobs was a very wise man.) Depending on the business, off-loading small bits and pieces like sales taxes, payroll or other tasks is a great starting point.
Stage 3 – Adolescence
The third stage is probably a year or two into the business and we can call it the Adolescence stage. You have a proven market and you have sales. Life seems to be going good except you might still be stuck in the DIY stage. Burnout is close and you have to decide what tasks you can let go of but still maintain the control of the company. This period of time is usually characterized by several thoughts including, “I can’t do this anymore and keep up the pace. I am going to die,” or for the less flamboyant, “I am tired.”
This third stage is usually where I meet most of my clients. They have a successful business but their personal life/home life is suffering. They haven’t been able to let go of the reins on some tasks but are still working 16 hour days. Their hair begins to fall out and in some cases before it falls out it turns grey. Usually, the conversations that begin to fix such circumstances start with the “tasks” that are needed and quickly goes to the real pain points.
These pain points are usually:
• I can run the business and satisfy customers but all this accounting stuff is wearing me out.
• I know a lot but I don’t know what I don’t know and that scares me.
• I am sure there is a better way but I don’t know what it is.
• I am paying too much in my taxes and I don’t know how to stop it.
• I have tried to talk to my previous CPA but they are too busy.
• My current CPA isn’t equipped to help me in my day-to-day activities.
No matter the pain point I have heard it all, probably experienced it all, and have a lot of wisdom to give.
After our initial meeting or maybe it’s even a current customer that now knows we can do more, we get to work and build a proposal to alleviate the pain. I bring in professionals for retirement funding, employee benefits and marketing to help you deal with the all the pain.
We have a whole team ready to take you to the next level and really start getting traction. Your business is your baby. If your child needed a doctor, a specialist or special consultant wouldn’t you do whatever it takes to help your child? It’s the same thing.
Help us get you to your next stages by tuning in next week for stages four, five and six.
If we can be of help call us today or contact us through this site.