Businesses Have 6 Life Stages - Where Are You?
No two small businesses are exactly alike.
They differ in size, organisational structure, management style and other important variables. Given this diversity, creating a systematic model that charts the typical lifecycle of a business seems like a Herculean -- if not impossible -- task.
Yet while business may differ in many key respects, they're almost all alike in one important regard: They must navigate the same growth-related challenges. This makes it possible to create a universal framework that can boost the understanding of the developmental problems faced by all businesses, from the kiosk on the corner to the Fortune 1000 contender.
If you understand the stage your business is in, you'll have the clarity you need to devise a strategy that helps you break through to the next level.
Charting Your Journey through the Six Stages of the Business Lifecycle
By using a simple six stage framework we can trace the path of a business from conception to maturity, charting the key milestones all the way. We can also use the six stages to understand how your business journey impacts the overall quality of your lifestyle. More often than not, the two are directly related.
With that in mind, let's review each stage, along with the corresponding emotions typically exhibited by those who are operating within them:
Startup -- Here the focus is on product development and securing the first customer. Revenue is minimal and funding typically non-existent. Excitement and energy are the order of the day -- both personally and professionally.
Wilderness -- In this stage, business owners are trading time for money, with a focus on survival. Customer segmentation is absent and productisation is lacking. Revenue is below $150,000 FTE. Because business owners are focusing on survival, nervousness and anxiety are prevalent.
Lifestyle -- Here, we begin to see the trappings of a professionalised business. Segmentation and productisation are in evidence, as is a commercial wage. Revenue generally exceeds $200,000 FTE. The team is small but dynamic. Ownership is better off both emotionally and financially than they would be as an employee, which makes them finally feel comfortable.
Desert -- Growth is thrilling -- but it presents its own challenges. In this stage we see expanding overhead and costs, with working capital depleted as the business struggles to accommodate growth. New investment and new workers appear. Stakeholders may receive lower returns, and revenue may backslide under $200,000 FTE, making owners feel deeply stressed.
Performance -- A spell wandering in the desert can make or break a company. For those who make it through, great things await: New customers, a defined growth strategy, an optimised capital structure, margin expansion, revenue above $350,000 per FTE and higher return on investment. This stage is for high-performance, high-growth, professionalised companies that deliver joy to their owners.
Unicorn - This stage exists in rarified air, achieved only by the best of the best. Global recognition, industry benchmark status and revenue in excess of $500,000 per FTE. It's the realm of the mature, fully-realised enterprise -- and it bestows bliss on its owners.
Struggling to Progress through the Cycle? Here's How Nine Advisory Can Help
At Nine Advisory, we understand how the success of your business impacts nearly aspect of your lifestyle. Our Nine Pillar Framework is designed to help your business move efficiently through the lifecycle by integrating best practices across every layer of your enterprise.
If you're stuck in the wilderness or wandering the desert, don't worry -- we're here to help you get back on track. A high-performance business that fulfils your needs is your destination, and we're expert navigators.
Contact us today for more information.