August 21


The three stages of your business

Every business passes through three distinct stages of life, much like their human owners. It’s important to understand these stages and what’s needed to progress from one stage to the next. Far too many small businesses die for failure to navigate the transitions from one stage to the next.

Each stage has unmistakable hallmarks. Where do you see your business?



Businesses in infancy are small. Often, they are solopreneurs where the owner is the chief, cook, and bottle washer. These business might have some hired help, but there is no doubt the owner is engine that powers the business.

These are the businesses that get started because the owner is tired of the boss. It’s time to put their skill, drive, sweat to work for their own account. This may sound familiar as the technician I’ve described before.

That’s exactly what a business in infancy is. It’s a business that is really a job the technician created for themselves.

At first, it’s exhilarating. The owner is the master of their destiny. No one to answer to but themselves. They do the work their way. They have customers who love them.

Happy, loyal customers beget more customers.

This continues until 8-hour days become 10-hour days become 16-hour days. Then the overwork starts to take its toll. Great work slips to good work. Good work slips to shoddy work. Happy customers become complaining customers.

What was once a dream is now a nightmare from which there seems to be no waking.

Something has to change.

It eventually does change when one of two things happens:

  1. The owner locks the door and walks away
  2. The owner accepts they need to make some changes

Most choose the first option. Those who choose the second enter Adolescence.

Don’t want your business to end this way? Tune in next week when I’ll talk about the steps you need to take to get from infancy to adolescence.



Small businesses enter adolescence when the owner realizes they can’t do everything themselves. This step marks the first emergence of the manager.

At the start of adolescence, the owner offloads the technician work they don’t know how to do or don’t like doing.

The production-oriented owner hires a salesperson. The creative hires a “left-brain type” to handle the details. Pretty much everyone hires a bookkeeper.

Feelings of relief begin to surface. The owner now gets to focus on the work they love. They’ve got someone else to handle the other stuff.

The owner’s step gets lighter. Lunches get longer. Their family is still awake when they get home. This must be what it feels like to have made it.

Not so fast.

When the owner doesn’t build the proper foundation, they end up facing a whole host of new problems.

Unfortunately, almost none do build a proper foundation.

Most owners end up practicing management by abdication instead of delegation.

In management by abdication, the employee’s job is to make the problem go away. How? Doesn’t matter. As long as the owner doesn’t have to deal with it.

I bet you can see where this is going.

Things start to blow up. They get bad enough that the owner can’t pretend the problems don’t exist anymore. When the owner steps back in to see what’s going on, they are shocked by what they see.

No one is doing anything right. No one cares. The owner is the only one who can do it the way it needs to be done.

This gets resolved one of four ways:

  1. The owner decides to get small again. They get rid of the people and handle the work themselves. Right back to infancy. Right back to being stuck in a job of their own making. A slow walk to the inevitable death of the business.
  2. The business flames out. The company just keeps going full speed ahead. Problems be damned. It all ends in a wrecked heap on the side of the road.
  3. The business somehow survives. Through some brute force of will or dumb luck, the business survives in spite of itself. In many ways this is the nightmare scenario. A never ending existence of crises and stress. This consumes the owner until there is nothing left.
  4. Get control of the business and develop the mindset needed for maturity.

As you might have guessed, most end up on one of the first three paths.

Getting on to path #4 is the heart of what business coaching does for owners.



The mature company is fundamentally different. It is a company that knows how it got to where it is, and understands what it needs to do to realize its vision. The mature company has a vision in the first place.

The mature company doesn’t work because of the owner. It works without them. It is the business that actually delivers on the promise of freedom the owner had when they started.

Much like a person is not mature based on their age, a business does not become mature via longevity. It is possible (common, even) that a business never grows beyond adolescence.

Reaching maturity requires a different view of what the business is. It requires deliberately creating a business that works.

Creating a business that works requires a belief that it’s not what the business does that matters. What matters is the business: how it looks, how it acts, how it does its work.

The mature business is conceived, designed, and run by the entrepreneur.

The mature business is concerned with how the business needs to work, not what work needs to be done. It sees the business as a system for delivering results that create profit, not for delivering work that produces income. The mature business starts with the end in mind and works backward to determine how to get there.


Wrapping up

Time to be brutally honest with yourself.

Where is your business? Which path are you on? Is that where you want to be?


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