Our business trains us to focus on the wrong thing. And we buy into the lie. The simple reason we don’t have a business that grows to Maturity? Simple – we are
There are Seven Stages in the Maturity of a business. Today we’ll focus on the first four, because they tell us what happened that screwed up our understanding of how to grow a business and why we can’t get off the treadmill.
In Stage 1 (Concept and Startup), we need money. To get money, we need clients. So a Stage 1 business teaches us that it’s all about making money via Sales.
In Stage 2 (Survival), we’ve been mucking along for a while and the outside funding is beginning to dry up. We need money even worse. To get money, we need clients. So a Stage 2 business confirms to us that it’s even more important to focus on making money via Sales.
In Stage 3 (Subsistence) we finally have done enough sales to get enough clients to break even. But we have to produce for these clients, because if we don’t produce, we don’t get paid, and we need money. So a Stage 3 business teaches us that we have to focus on making money via production, or our Craft.
And finally, a Stage 4 business (Stability by Hands-On, focused on the producing the “Craft”)) allows us to buy a hot tub and go on vacation a couple weeks a year, confirming to us that the owner’s purpose is to make money.
But what our business taught us in these first four stages is exactly what keeps us on the treadmill for 30 years and never lets us off. Our business taught us that we should make money, and it is that misconception that keeps us from building a business that makes money when we’re on vacation. We’re on the treadmill of making money.
Unfortunately our bias toward the treadmill of making money is confirmed as we look around and see most other businesses stuck in Stage 4 as well. So quiet desperation sets in – this must be all there is. And to add insult to injury, at some point we realize that if we had stayed at IBM, we could still have bought a hot tub and gone on vacation a couple times a year, except in that case we would not have lost money while on vacation or had to wake up nights wondering how we’ll pay off the debt we incurred in Stages 1 and 2.
Why did we do this? How was it worth the trouble and the responsibility we’ve taken on? Why did we decide to buy a job and become employees of ourselves?
We did it because 1) our business taught us to make money, and 2) we see that most other small businesses have gotten stuck on Stage 3 or 4, confirming that this is actually normal.
Stage 3 and 4 are not normal at all, they are merely average. Most businesses have stalled there, but the normal business will break through to Stages 5-7 and make money for the owner when the owner is not there.
Stop being an employee of yourself, get off the treadmill, and get back to the passionate that brought you into business in the first place. Next week we’ll talk about the clear simple actions that will allow us to do just that.
The simple solution – One motivator and two bosses that keep us moving toward building a business that makes money.
The motivator – Lifetime Goals. We think making money is the goal of business. Wrong. Making money is not an empowering vision, and it won’t get you out of bed when money is hard to make. But having a powerful over-arching reason to build a business will carry you through the tough times. What are your Lifetime Goals that you can use your business to achieve? Get a bigger reason to be in business than make money or you’re likely never going to make much of it.
The two bosses:
Boss #1 – A strategic plan. Not a business plan – those are for bank loans, then they sit on a shelf. I mean a 12-month rolling strategic plan by which you manage every strategic and tactical move in your business. Four simple components – 1) A business vision (the big why/values) , 2) mission (the big what – your marching orders – the RESULT you get your customers), 3) 1-3 year strategies (how you make money), 4) 12 month measurable objectives (how you measure success at making money).
Once you have the vision, mission, strategies and 12-month objectives, you can easily figure out what to do in the next 3 months to reach those 12-month objectives. This makes it simple to figure out what you need to do this month. At the end of 3 months, plan the next three and push your 9-month Objectives back out to 12-months. Rinse and repeat faithfully every quarter.
A Strategic Plan that runs your business automatically keeps us balanced between taking care of the Tyranny of the Urgent (making money today), and the Priority of the Important (building a business that makes money.) VISIT YOUR STRATEGIC PLAN WEEKLY TO KEEP FOCUS!
Boss # 2 – Outside eyes on you and your business. A strategic plan that runs your business is great, but you also need others from outside your business to help you keep clarity and direction. My business is my baby; I’m subjective about it. Others will have a much more objective view and be able to see things I would never see. Get a peer advisor or better yet a full peer advisory group and meet once a month. GET OTHERS SUPPORTING YOU AND YOUR PLAN!