Did you start your own business because you were tired of the constraints of your job and you craved more freedom and flexibility? Perhaps you don’t like working for someone else and you wanted to be your own boss? Or maybe you went into business because you have a product or service that you’re passionate about and you love making a difference in the lives of others through your work.
There are so many benefits to working for yourself, and being your own boss really is a beautiful thing.
But on the flip side … it’s also really hard to establish a profitable business and there’s a reason why only one in ten startup businesses actually succeed.
Too many people go into business with rose coloured glasses on, expecting the ride to be easy, fast, and fun.Too many people go into #business with rose coloured glasses on, expecting the ride to be easy, fast, and fun. #fempiremagazine #businesstips Click To Tweet
But becoming a successful business owner doesn’t happen overnight.
One of the hardest things I’ve experienced as a business coach is managing a clients’ expectations when they first come to me for coaching. Often a client will say things like “I need to generate $100k within twelve months in order to replace my corporate salary.”
I then need to introduce them to the six stages of business growth and show them how this goal is unrealistic and highly unlikely (unless they’ve already worked through the first three phases).
We live in a world of instant gratification, and unfortunately, the reality is that building a business takes time, persistence, hard work, and perseverance.We live in a world of instant gratification, and unfortunately, the reality is that building a #business takes time, persistence, hard work, and perseverance. #entrepreneurlife Click To Tweet
So what are the six stages of business growth?
And why is it essential that you find out which one you’re in?
The 6 Stages of Business Growth
As you can see, there are four major phases you need to work through before you can start generating profit. And those phases can take anywhere from 18 months to 3 years, depending on a variety of factors.
The key message is that there’s a period of time in which you’ll need to invest money into the business, before your business will start returning a profit. And this is the message that many first-time business owners don’t fully appreciate when they start out on their journey.
In a nutshell, you need to invest money in order to grow a business.
Unless you’re fortunate enough to attract an angel investor who provides full financial backing for all of your up-front investment requirements, you’re going to have to put money into your business in order to establish the foundation it needs.Unless you’re fortunate enough to attract an #angelinvestor who provides full financial backing for all of your up-front investment requirements, you’ll have to put money into your business in order to establish the foundation it needs. Click To Tweet
Typical initial investment requirements include the cost of business registration, building your own website, developing your marketing and brand materials, and investing in any inventory or materials you need to get set up and started.
A common complaint from my clients in the beginning is that “everything costs money”.
And especially in the beginning, it feels like you’re constantly spending money on your business, with little coming back in terms of revenue. And this phase can feel extremely frustrating, uncomfortable, and scary. It will most likely trigger all your deepest fears and insecurities. This is the point where many people decide to give up and go back to get a job.
But as a startup business owner, you have to appreciate that even when you can’t see the fruits of your labour yet, all the work you’re doing is laying the foundation of a profitable business. There’s no avoiding going through this phase that feels like hard work for no return.
You have to trust that with persistence and focus, you will eventually hit break through and profit.
I highly recommend you take the time to get acquainted with the different stages of business growth and you understand the critical elements you need to be focusing on in each phase.
3 Important Reasons Why You Need to Know Which Phase of Business Growth You’re In
1. You Can Focus Your Time and Energy on the Right Things
There are so many bright, shiny objects in the entrepreneurial world (have you fallen prey to the Shiny Object Syndrome (SOS) before). Every marketer seems to have ‘the silver bullet’ to your success.
Back when I was first starting out, I spent so much money on different courses and programs, each one promising to help me finally make the progress I wanted. Everyone had conflicting advice and a different ‘system’ that made them millions, if you just follow their advice. There’s no one perfect system or approach that suits every business.Everyone had conflicting advice and a different ‘system’ that made them millions, if you just follow their advice. There’s no one perfect system or approach that suits every #business. Click To Tweet
How do you decide whose advice to follow or what to spend your time and energy on, and when?
Once you understand the different stages of business growth, you’ll appreciate that there are a few key things you need to focus on in each phase.
Don’t get distracted by the shiny objects and be sure to focus your precious time and energy on the right things!
2. You Can Intentionally Plan and Manage Your Cash Flow
Once you know which stage of business growth you’re in, you’ll be able to plan your financial resources more effectively.
You’ll know exactly which things to invest your money on in order to move through to the next phase most efficiently. You’ll know where to spend your money for maximum growth and biggest impact.
And perhaps more importantly, you’ll know what not to spend your precious money on in each phase of business growth.
3. You’ll Find Greater Peace and Acceptance (and Enjoyment) with Where You Are in the Process
It’s easy to feel perpetually frustrated if you don’t understand the business building process. If you’re measuring your level of success and progress in terms of dollars in the bank, you’ll be constantly disappointed (especially in the beginning).It’s easy to feel perpetually frustrated if you don’t understand the business building process. If you’re measuring your level of success and progress in terms of dollars in the bank, you’ll be constantly disappointed. Click To Tweet
You’ll need to establish different measures for your success in the beginning, for example by client feedback, by how quickly your email list is growing, or how many word of mouth referrals you’re gaining through your networking, or how your website is converting, to name a few.
Progress is all about measuring your success with the right metrics. And appreciating that you’re moving up the trajectory of business growth, even when you can’t see dollars in the bank (yet).
I hope you find the courage and strength to stay true to your path, because with passion, persistence, and great support, you will get there and establish a thriving, profitable business!
What stage of business growth are you in at the moment? Let us know in the comments below xox
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Kate De Jong is a blogger and coach who understands what it is like to juggle motherhood and entrepreneurship