Do you know what stage your business is in?
Small businesses go through four stages. These are start-up, growth, mature, and renewal/decline. We don’t want to get too hung up on these labels as there are certainly other ways to describe the life cycles of a business.
The important part here is that you figure out what stage your business is in. Because to get where you want to go, you have to know where you’re starting from.
Although sometimes these stages are linked to the amount of time one has owned their business, oftentimes it’s not. It’s common for me to speak with small business owners who are 5ish years into their business and believe they are pretty far along.
But their number one question? How to earn enough money or to find enough clients. That entrepreneur is still in start-up stage, at the same level as someone who’s only 1 year into their business.
Other times I meet a business owner who’s been at it for 5ish years and she’s in her growth phase, or even starting to mature.
Each of these owners of 5 years needs different business advice based on their stage of business.
HERE ARE TYPICAL TRAITS OF THESE FOUR STAGES:
- START-UP: primarily you are figuring out what you sell and how to sell it. You are meeting lots of people, trying to create your product or service, testing and refining it, and trying many different ways to get buyers. Business is not consistent and cash coming in is not predictable.
It’s a bit of a rollercoaster with ups and downs that range from hopeful to exciting to overwhelming. The business is not sustainable at this point because either you work too many hours, don’t make enough money, or both.
- GROWTH: You know what you sell and have had enough buyers to hone in on the ideal client. Business is consistent and you have a good idea of how to continue generating money. Other people can see what your business does and can easily explain it to others they may be referring.
Investments of time or money are needed to make the biz sustainable in this stage. You must begin to develop processes and systems, hire some level of support, and develop additional products/services so you have more than one stream of revenue if you want to move to the next stage.
- MATURE: Revenues are stable and business growth continues at 5% or more. Clients work with you repeatedly and have developed into relationships. The business runs in a consistent, stable manner with little or no emergencies.
You feel stable and that your business is reliable. You may enjoy this period or look for new growth opportunities. This stage is the optimal time to plan your cash out or sale of the business, or to invest to create additional stability. Keep an eye out for any decline to begin.
- RENEWAL/DECLINE: Even though business may seem like it’s going fine, there’s not much innovation occurring or there is a lack of continuing investment in technology, marketing, and people support. Clients are still engaged but there could be signs like fewer clients coming in or the loss of major clients, with only smaller engagements filling in.
If the business loses money for three consecutive quarters, decline probably started a year or two prior. Here you must either retire, cash out, or decide to renew your business. Talk with financial experts to understand your options, or marketing, technology, and sales specialists if you want to refresh and take the renewal path.
Can you identify where your business is? Keep your assessment neutral and don’t create a story about what your stage means. Just note it and make decisions from that place so that you can get to where you want to go.
Your marketing also has stages and knowing your stage is the single biggest factor in knowing what marketing tasks to tackle next. When you try to do them out of order, overwhelm and frustration are frequent companions.
If you take a look at this graphic, you can see the steps on the pathway. It starts at the top center with Own It and goes around clockwise:
I developed this pathway after working with and studying hundreds of entrepreneurs in their small businesses. Although it has some overlap with larger businesses that have staff, it mostly applies to the solopreneur or small business owner whose business revolves around them (even though they may have staff).
This is why so many small business owners get confused. They read about marketing advice meant for much larger businesses when they dive into online articles or magazines and it doesn’t work. This pathway clears a lot of confusion and lets you sequentially build upon each success to a mature business.
This marketing pathway includes dealing with personal stuff because it should. A small business owner’s life and their business are intertwined and each influences the other so both have to be considered.
There may be some surprising information in this pathway if you’ve never considered marketing in this way before. Like that Getting Seen, or what we might think of as “typical” marketing, is the 5th step and not the first. So often I meet small business owners trying to market themselves without having mastered the previous four steps.
If you don’t get the results you’re hoping for there is almost always a missed piece of the pathway behind you.
It makes sense if you think about it. Imagine that you’re not sure about your business, or you don’t have messages that get a response from the right people, or you haven’t created something that people want to buy, and you are trying to get seen. Even if people see you, they aren’t likely to become clients.
And there’s no amount of efforting or marketing trick that can fix that. You must go back and address the earlier steps if you want a different outcome.
Once you know where you are, you can take steps to finish off the stage you’re in and see exactly what your next marketing steps are. That kind of clarity is golden.
Even if you’re sure your business is far along the pathway, consider this: it’s a circular pathway without a definite end-point because every time you introduce a new service/product or renew your business, you must go through the same steps.
So in the life of your business, you may walk this pathway many times.
I’ve even seen seasoned entrepreneurs skip a step like Message It when doing something new and scratching their head when they don’t get the response they hoped for!
It’s always worth knowing where you are.
I mean really, it can be a total relief to admit what is (rather than what you hope or think is) and this kind of honesty is needed if you want to move forward successfully.
So go ahead and take an honest look at where you are. I promise that you’ll be glad you did.
From my soon to be published book The Authentic Marketer: Create the Mindset You Need to Grow Your Small Business and Love It.