The Seven MUST DO’s of the Building Stage

Here are the seven things YOU MUST DO NOW to keep your business thriving and on track to the Stability stage.

1. Understand the Five Stages of Business
2. Create an Interactive Business Model
3. Practice the Six Ritual Meetings
4. Have a Trusted Advisor
5. Manage Your Resources
6. Do Business on Purpose
7. Work Smart and Hard!

1. Understand the Five Stages of Business

I wish someone would have told me about the Five Stages of Business when I started my first company.  That information would have saved me a lot of headaches, money, and years of work. Lucky for you, I’ve listed them below.

The Five Stages of Business are:

  1. Start Up
  2. Building
  3. Stability
  4. Growth
  5. Wealth

The first stage is Start Up or the birth of the business. It is when the initial products and/or services are developed.  Next comes the Building stage when the business must find its way to economic stability as quickly and cheaply as possible by acquiring key customers and repeatable processes.  Stability is third stage.  It is the stage where the founding team can rest and rejuvenate after the hard work that occurred in the Building stage.  In my opinion, Stability is the goal for any new business. From the platform of the Stability stage the business may choose, or not, to move into the fourth stage which is Growth. Be careful! Risks taken in the Growth stage can return a company back to the Building stage.  The fifth stage, Wealth, is traditionally a liquidity event, but Wealth can be more subtle. Wealth can be a lifestyle or a transformation of the business or its owners. To achieve the Wealth stage you must be clear about what Wealth means to you.

It is important that you clearly understand the differences between the first three stages, Start Up, Building, and Stability. The goal of any business, my friend and mentor Jim Vollett says, is to reach the Stability stage “as quickly and cheaply as possible.”  Once a business is stable, an enormous number of choices are available.

The Startup stage is fun, exciting, and fueled by the entrepreneurial energy that comes from starting something new. The Building stage can be fun too, if it is done right, but many first time entrepreneurs aren’t prepared for what can be the years of hard work required to get a company out of Building and into Stability. Like an extended backwoods camping trip, good preparation and maps can make the difference between a pleasant and challenging journey, or utter disaster. If your business is wearing you out and needs your attention every day, you may be stuck in the Building phase. I have a lot of experience helping business owners large and small move from the Building stage into Stability. Send me an email if you would like to discuss my consulting services.

Steve helped us take our business to a whole new level! We were successful, but stuck. Steve’s insight, skill, technical expertise, and management acumen helped us create the processes that freed us up to have more fun, get more done, and make more (a lot more) profit! ~Bob Negen, Retail Expert, Author and Speaker

Each of the Five Stages of Business requires a specific type of leadership. The frenetic, ad hoc style of the Start Up stage must be replaced with disciplined management practices in the Building Stage if the company is to arrive, and remain safely, at the Stability stage.  The entrepreneurial techniques that brought the company into being must be augmented with ritual management processes.  Some entrepreneurs unconsciously keep their company at the Start Up or Building stages because that is where their personal talents are most appropriate. Giving your company the right type of leadership, management, and resources for the stage it is truly in will decrease your stress level and increase your profits.

If your business seems stuck, or you are exhausted, you may be using the wrong techniques for the current stage of your business. The good news is that getting your business unstuck is straight forward and can happen in as little as three months.

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2. Create an Interactive Business Model

Traditional business manuals advise entrepreneurs to write a business plan.  I disagree, that’s a waste of time in most cases. As a matter of fact, I see no reason to write a formal plan unless you are trying to raise capital from firms that require it. Companies that want to fund you will ask for what they need. Wait until they do before investing months into writing out a plan.

Instead of writing a formal business plan, I suggest you create an interactive financial model that lets you simulate your business. If later you need a written plan, this model will make that work much, much easier.

I build these type of models in Microsoft Excel because most people have Excel and know how to use it. Business model simulations enable you do forecast and play “what if” games. Business quickly becomes too complex to manage in your head or from accounting reports. To really understand how your business works and what metrics you need to measure, you must have a interactive model. Running a business without an interactive model is like flying a plane without instruments. Sure, it can be done, but it’s mighty stressful.

Steve’s models showed us what outcomes were possible, likely, or just a dream. The company that bought Atrana Solutions made their decision based on our Excel models. You can’t make a realistic business plan without one. ~Salah Boukadoum, CEO Soap Hope

Your business model becomes your instrument panel.  It enables you to see the financial reality of your business and predict what might work and what won’t. When the overwhelming day to day reality of running your business begins to cloud your judgment, it will be your ability to “fly on instruments” that will keep you from crashing. I do not understand how anyone runs a business without one of these.

Your model will help you identify the key inputs and outputs of your business. It helps you understand how all the elements of your business fit together. The process of building the model forces you to see your business as a set of connected systems. A functioning simulation gives you the ability to easily work on your business instead of just in your business. I believe an interactive model is a must have for every successful business.

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3. Practice the Six Ritual Meetings

In the Start Up stage, a business usually begins with small team of people. Meetings occur as needed to collaboratively solve problems and share ideas.  But once a business is in the Building stage it needs to develop disciplined processes that nurture efficient use of resources.  Too many meetings quickly kills, while too few meetings can result in a fragmented team and chaotic environment.

I was originally introduced to the idea of meeting rhythms in Verne Harnish’s Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Growing Firm. Over the years, I’ve tweaked the content and style of each meeting to find a mix that is highly effective yet easy to implement. The Six Ritual Meetings is a must have foundation in any company.

If you have ever been in a long protracted meeting where nothing much gets done, you may be surprised that I promote meetings as a means to create efficiencies.  Not all meetings are created equal.  Each of the Six Ritual Meetings has its own personality and purpose.  Paramount to all of them is to stay on task and within the designated time allotment.

Meeting Type Meeting Length Resolution Purpose
Daily Stand Up 10 minutes Daily Quick daily updates
Tactical 55 minutes Weekly Getting things done
Strategy 85 minutes Monthly Making plans
Steering Half day Quarterly Steering
Board Half day Quarterly Visioning
Issue 55 minutes or less As needed Issue Resolution

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4. Have a Trusted Advisor(s)

You are unique. What makes you unique is the combination of your biology and the experiences of your life. You have a unique view of the world comprised of your memories and the neural systems of your brain. There is no one else in the world like you. If you want to understand your business, you must understand yourself, because your business is a reflection of you.

I find that most challenges in the Building stage of the business don’t come from the market, economy, or product/service delivery. They come from the psychology of the founding team and their relationship to each other and the staff.

Steve helped us deal with the issues of change and the interpersonal aspects of how we work together. We quickly saw a difference in our efficiency and clarity of roles. I highly recommend Steve to any organization or individual wishing to change and not knowing how, especially when the goal is to help the business grow beyond where the founder can take it. ~Linda V. Berens, Ph.D

The simple fact is that your business isn’t going to grow if you don’t grow too. As your business evolves and moves through the Five Stages of Business, you will be changing too. If you want your business to grow quickly, you’ll need to be prepared to grow and change along with it. I suggest every business owner take seriously my recommendation to have at least one trusted advisor.

You must have a trusted adviser with whom you can openly talk about your experience of leading your business. That means not just profit, but your thoughts and ideas and even emotions of running the business. You need someone with whom you can be honest about what energizes you and what bogs you down, what you do well and what you are having trouble with. Even if you are blessed to be working in a good business partnership, I suggest you have an advisor that is outside of your business.

Your advisor might be a professional mentor/coach, but it need not be. It can often work well for a handful of business owners to form a small group and meet once a quarter. However, if your business is in crisis I recommend you work with a professional mentor/coach at least three times a month.

Being CEO and responsible for directing the business can be a lonely role. Steve has been a trusted confidant and guide, with wisdom from experience. He’s helped me be a better leader, strategist, and human being. I feel a complete sense of freedom and confidence with him on the team as we take the company to the next level.
~Shawn Philips, CEO, Philips Performance Nutrition

NOTE: My schedule no longer allows me to provide phone based hourly consulting/coaching services. Periodically, I host Executive Retreats and Executive Councils. Both are by invitation only. If you would like to receive an invitation please join my mailing list and indicate you are interested in joining a local group.

I do not believe in “self help”. We need each other and trusted mentors to see ourselves and our skills clearly. No book or online course can replace sitting down with a trusted advisor and talking about your business. If you don’t have one, find one immediately.

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5. Manage Your Resources

coming soon…

6. Do Business on Purpose

coming soon…

7. Work Smart and Hard!

coming soon…