OK, so you're building the business of your dreams. But do you have any reference point for how your business actually affects you personally? If you don't, you just might be building a trap for yourself, not the business of your dreams. If you don't have a handle on the Seven Stages of Business Ownership, you're likely to flame out personally, even if your business is successful.
Will You Be Owned By Your Business? Just about every business founder/owner makes the mistake of assuming that if they build a great business, they'll automatically get a life, too. Big mistake. If you're building a business, you need to be as intentional about eventually getting a life as you are about building the business. Building the business always comes first, but if you don't intend to USE your business to build your ideal lifestyle, you won't own the business; the business will own you.
There are plenty of tools to grade what stage your business is in, but none for measuring how your business is impacting you. Here's one from our book, Making Money is Killing Your Business that focuses on what the business is doing for (or to) you personally. As you read through the Seven Stages of Business Ownership, ask yourself,
1) What stage am I in personally, and
2) What stage is my goal? You can stop anywhere from Stage Five through Seven. But if you stop at Stage Four, which most business owners do, you will always be a hostage to your business. Stages One through Four are about generating money. Stages Five through Seven are about ensuring your business generates both time and money for you.
Get to at least Stage Five so you can have both.
Stage One--Start Up
Pouring time and ideas into creating the business & getting it off the ground. This is fun!
Stage Two--Survival Survival is everything; funding is drying up. Urgently driving sales. We burn a lot of fuel on takeoff. I didn't think it would be this hard."
Stage Three--Subsistence Regularly breaking even--woo hoo! But the business is totally dependent on me. Tension..."If I stop, the business stops. Must keep going...
Stage Four--Stability (& Growth)Regularly profitable, finally. The "American Dream!", followed in a few years by quiet desperation. Outwardly successful, inwardly deflated. My business owns me."
Stage Five--Success Now others can "make the chairs." The business makes money when I'm not around and I don't have to stitch it back together when I return. Only 5%-ish of business owners ever get to Stage Five. You can make millions and be stuck in Stage Four for decades because you have no time to enjoy the money. The reason only 5% make it? The Big Mindset Shift. They decide to demand that their business give them BOTH time and money, not just money. It's that simple. "I'm off the treadmill!"
Stage Six--SignificanceLeadership inplaceThe owner is about vision and guidance, not production. "I'm focused on making a difference, not making a chair."
Stage Seven--SuccessionLeadership incharge. The owner delegates guidance and focuses on vision, passing the day2day torch of leadership to others. They become "the myth"--when they walk in, people whisper, "Hey, that's the person who started it all." Leadership--"I used to solve and decide. Now I ask questions."
Beware Stages Four and Six Stage four is the most dangerous stage. The urge to escape any future risk to get to the next stage keeps us on the treadmill for years, if not decades. But stopping at this stage ensures you bought a job, not a company, and will ensure you regularly fall back into Stages Two and Three.
Stage Six is the second most dangerous stage. If you go off and "play" too quickly at this stage, you will come back to a disaster. Focus for just a little bit longer, and make sure someone else is giving day-to-day guidance, and reporting transparently to you.
Which Stage is Your Objective? Where are you? What's the one thingyou need to donowto get to the next stage? There's a hundred things you could do; just do the next one. If you can't get past Stage Four, it's head trash. Nobody is as good, competent, experienced, committed, etc. You made that come true. Stop it.
If you're in Stage Five or greater--congratulations--take the next month off with pay. They won't miss you!
Article as seen on Inc.com