Stages Of Business Ownership

By Dominic Bruneau | Profusion Consulting

03 Feb 2022

In Michael E-Gerber’s book ‘The E-Myth’, he discusses the three key stages of a business and looks at the different roles a business owner has in fulfilling the journey to success.

Understanding the key stages of a business owner’s journey and how they correlate to the development stages of a company is vital to the planning process. It is also critical in helping to manage emotions and ensuring you take action.

I always encourage my clients to focus on taking action – no matter how small: it is vital to ensure forward momentum.

The stages of a company

Gerber refers to the company moving from infancy through to adolescence and then finally maturity. The journey is, in the main, quite easy to understand and relate to. However, the journey of the business owner often blurs the lines between those stages and adds complication to the planning of a company’s growth. It is often said that it’s the owner that ultimately holds a business back from fulfilling its potential.

An owner’s journey

In the infancy stage, most businesses will be small, and the owner will be ‘hands on’ at the centre of everything. The journey starts with the owner fulfilling a role referred to as ‘The Technician’. Moving on from this stage means recruitment and expansion. Whilst this is a skill set, it is now the owner who must plan how to move into ‘the Manager’ stage. This may require new skills and knowledge to make the successful transition.

Reality

I get approached by many business owners who appear, on initial review, to run a successful business. They often have decent turnover and earnings, they have employees and generally have a satisfied, and sometimes even loyal, customer base.

However… have you ever heard someone tell you that they are working more hours than ever before, they don’t have time, or they are too busy to plan for the future?

This is the point where personal development is vital. Understanding your current position and the steps required to move forward is crucial to successfully growing the business. Often, instead of powering through ‘the Manager’ stage, business owners slip back (if they ever moved away from it) into their comfort zone of being ‘the Technician’.

What stage are you at and do you have a plan to navigate through to entrepreneur, which is the stage after ‘the Manager’?
Do you slip back into ‘Technician’ and do you understand why?

Start with end

In my goal-setting webinar and training, we talk about the importance of setting a goal that has a clear end. You must know the final destination of your journey; you and your team must know when you have achieved your goal.

Celebrating your achievements along the way is also an important step, which I’ll cover in a later article.

When a company hits maturity, its owner is an entrepreneur

Just as when you set a meaningful goal, you must have the end in sight. When you start a business, you should have identified your ideal outcome.

What are the plans for your business?
Are you looking to generate a passive income?
Are you looking to scale it to a point that it can be sold?
Are you looking to set it up so that it can run without you, but you can still earn a salary?

If the answer to any of the above questions is yes, then you have to be an entrepreneur and your business has to be mature.

If the business relies on you, you are in effect the business. How much value does that business truly hold without you?

All you can sell is goodwill or a client database. There is a token value, however, you are the real value.

If your business is mature and you have truly achieved the ‘entrepreneur’ position, you are working on the business, you have diversified the business, assembled a team and system that means it can run smoothly without you, is scalable and everything it does is repeatable.

All successful businesses have a clearly defined goal which is understood by all those involved..

There must be a strategy in place to deliver objectives, across the whole organisation, from management through to individuals. There must be a plan for marketing and growth, and everything should have a system.

Test and measure

Once you have a plan that covers all the necessary strategies, you can start to take action (that phrase again) accurately and consistently.

With clear goals, and by working on effective strategies in all relevant areas, you can start to see steady progress, and form the habits that lead to continued growth and success.

It is important to continually ‘check in’ to make sure you are on track, to understand what is and what isn’t working and what little tweaks you can make to ensure you continually move towards your goal.

It is important to understand that plans can, and indeed should, change, but the goal never should.

How do you review your progress?
Who is responsible for maintaining standards?
Do you have someone to hold you accountable for your actions?

In the early stages of running a business it can be difficult to clearly see the future; it is normal to feel overwhelmed and it is OK to experience these moments. Running a business can be lonely – there are many different hats to be worn and there are many things you may not know.

At Profusion, we specialise in working with Business Owners who have found obstacles in their way. We help to ensure your goals are meaningful and that your business knows where it is going. We help you through the stages of infancy, and help you progress from adolescence to maturity as a company by making sure you move from technician to manager and then to entrepreneur.

Building loyal customers

For me, it is vital that everything we do must represent the value our target market is looking for. We should be aiming not just for repeat customers but for loyal customers.

Loyal customers are those who will use you no matter what others are offering. They make decisions based on trusting you or your products, not on price or incentive or special offers. Think of brands like Apple. Their customers upgrade regularly and rarely search the market for better deals, yet there are other phones which are cheaper, with better technical specifications and quicker delivery times. Apple customers don’t care. This is linked in to my first blog – WHY?

How often do you focus on your customers journey from their perspective?
How often do you research the customers in your sector who are not using you, rather than getting feedback from those that have used you?

I often find it bemusing that companies seek feedback from their customers. They should know that their service is of a level that will create satisfaction, there should be no doubt.

A true entrepreneur with a successful business will find out what they need to do, to not just satisfy their existing customers but to attract new customers. They will find out what those customers want or need to become their next customers.

Look after your existing customers well enough, so they automatically become loyal.

Then spend time and money attracting new customers.