Saturday, June 22, 2024

Business Owner Growth Cycle: The Path to Success

All businesses start the same – someone has a product, an idea or a particular set of skills that can be exchanged for value. Some businesses start with hot product and a ready market and get off to a very quick start. Others require more nurturing and are hard work to grow. Businesses also come in many different types (service provider, retail, manufacturing, etc…) offering an almost infinite number of products and services.

However, whether you are selling mobile phones to the world or selling your harvest to a local grain distributor, most business owners experience the same concerns and challenges as they pass through the varying levels of development.

We refer to these phases as the Business Owner Growth Cycle. Some business owners work through all the levels quickly and are sell their businesses off for a profit. Some grow their businesses very slowly and stay in the early stages of business growth and development for a variety of reasons, despite the owner’s efforts to grow.

We’ve broken the Business Maturity Cycle of ownership down into four phases:

Level 1 – Worker Entrepreneur

This is where every business owner takes the first steps to make their dream over financial independence come true. There is a frenzy of activity during this time and business owners are often left wondering what to do to get their business to the “next level”.

During this time, business owners

• Develop the product or service for sale
• Identify target markets and opportunities
• Set Prices
• Build brand recognition
• Develop business referral sources and distribution channels for products
• Build the infrastructure of the business, online and offline
• Operate the business themselves, and enjoy the freedom of ownership
• Find themselves being stretched to the limit
• Feel like it is difficult to enjoy a lot of profitability yet

Level 2 – Business Leader/Manager

As an organization establishes a foothold in the marketplace, the owner can grow the business beyond him or herself. During this period the challenge is to handle “growing pains” and delegate, laying the foundation for reaching the Executive level.

• Need to hire and train employees, but the initial impact on the bottom line hurts cash flow
• It’s difficult to find trustworthy outside experts
• Feel pressed to develop new ways to manage vendors who directly impact customer service
• Exponential growth in demands on the owner’s time and resources
(the owner often doesn’t realize they could be a bottleneck to growth)
• Where to find time and expertise to analyze and improve systems that don’t work like they used to
• Efficiency and profitability are becoming an obsession
• Lack of funds for growth

Level 3 – Executive

The Third Level is where the business owner can step out of the role of manager of daily operations and into the role of director of operations and strategic planning for the business. The owner will have a management team reporting to him or her and who will help the owner shape the future of the business. Few business owners reach this level of Business Maturity and those that do concentrate on these larger issues so they can grow into Level 4.

• Changes in the company’s target market
• Entry of competitors into the field
• Expense management to prevent profit margin erosion
• Create an executive team to help the owner lead
• Maintain a healthy corporate morale with everyone aligned to the company’s vision, mission and values

Level 4 – Investor/Visionary

Finally, the business virtually runs itself. A solid management team is accountable to the business owner, its employees, vendors and clients. The business owner is more of a director than CEO, ensuring that things are going well. Providing leadership, often from afar, the owner is not involved in day-to-day operations, and only intervenes in operations in times of duress or transition. The business owner can now focus on other opportunities and the business is an investment more than an occupation.

Curious about which level you are at in the Business Owner Growth Cycle?

Click here and complete the Business Maturity Index Assessment. This is a simple, 20 question survey based on common traits of companies at various stages of the Business Maturity Index and it’s free! Based on your answers, we’ll identify where you are in the cycle and share some insights with you on common concerns our clients experience in the cycle level you are currently in.

Questions? Feel free to reach out to us with any questions at

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