Do you know what stage of business you’re in? Stages are often classified by funding levels (pre-seed, seed, Series A and so on) or by revenue levels (startup, mature, Fortune 100 and so on). But, this often dismisses the proper view of what stage your business really is in. I caught up with Ron Malhotra of the Black Footed Business Advisors to talk more about this fascinating topic. It’s very possible that you’re not in the stage of business you think you are, and there’s a hidden obstacle in the way of you moving to the next stage.
If you’re frustrated with your business’s recent progress (or lack thereof), it’s probably that one of the following issues is hindering you. The bright side: once you can diagnose the issue, you can resolve it and move into the new frontier of your company.
1. Lack Of Clarity About Which Stage You’re In
Contrary to popular opinion, the stage of your business has nothing to do with how long you’ve been in business or how much money you’ve made. It is more oriented in the maturity of your business, and how you’ve responded to every hiccup in the scaling process. Malhotra shared that the real stages of business include the seed, start-up, growth, consolidation, and freedom stages.
The seed stage is likely where you were previously: right when the business launched and the proof of concept was being ironed out. Then, the start-up stage was putting all the pieces together and bringing the proof of concept into an operating business. Growth expanded upon this, bringing more clients into the funnel and serving more and more people.
The following stages aren’t discussed as often. The consolidation phase is when the business begins to merge with other competitors, or reveal itself as a reputable contender in the space. It may take on a greater market share at this time. And finally, the freedom stage is where freedom abounds: the business runs like a well-oiled machine, providing the freedom to acquire new companies, expand locations, add to the product selection, or simply enjoy the profits.
2. Unsure of The Exact Seed Issue
The lack of clarity around the exact seed issue can occur when you can’t pinpoint exactly what stage you’re operating in, or you think you’re operating in one you aren’t. For example: you may think you’re in the growth stage, but you haven’t ironed out the startup stage issues enough to grow sustainably. Thinking you’re in the growth stage but failing to see any markable growth often points to a seed issue that you didn’t know existed.
Malhotra noted that this could be an issue of mistaking an effect for a cause. “Many business owners may have cash flow issues, but the cash flow issue is an effect. The cause could be an ineffective marketing plan, uncontrolled fixed costs, unfavorable supplier terms, an unreliable lead generation system or another factor,” he shared.
3. Lack Of Clarity Around How To Handle The Business Problem
Finally, once the problem has been accurately diagnosed, it’s hard to fix it — which is likely why it arose in the first place. Maholtra said that every problem belongs to one of three core categories. “There are people problems, money problems, and time problems. Within each category, there are frameworks designed to rectify the exact issue that is causing the problem,” he shared.
So, as a starting point, Malhotra recommends going down the list and knowing “what you don’t yet know.” Many stay blind to their business problems simply because they can’t see the root cause and don’t know where they are. Marking areas of confusion is the first step to understanding where you really are, and what needs to be solved to reach the next stage of business.