Last week I introduced the correlation between the growth cycle and creating a self-sustaining business in my post “What Is a Self-Sustaining Business?”. This week I’d like to share how to begin moving toward making your business self-sustaining!
Achieving a self-sustaining business is easy enough. You just have to achieve the goal of each of the first 3 stages of the growth cycle!
Two things prevent small business owners from getting there. First is most small business owners get distracted. They get advice that takes them in a hundred different directions! Without a focus of purpose it is easy to get sidetracked.
Here is how to get focused purpose quickly. When someone gives you advice or guidance ask yourself the following question:
Will doing this take me closer to achieving the goal for my business’ current stage of growth?
If the answer is yes, do it. If the answer is NO, drop it like a hot potato!!!
The second thing preventing small business owners from achieving a self-sustaining business is they don’t know the stages of the growth cycle. Even fewer know the primary goal of each stage.
What are the 3 Stages of Creating a Self-Sustaining Business?
Stage 1 of the growth cycle is the Existence stage. Your goal in the existence stage is get monthly cash flow to consistent breakeven.
Most people think this is the startup of a company. But in fact, many businesses that have existed for years struggle to breakeven month to month.
To conquer the existence stage the business owner needs to create a company system both to create consistent monthly cash flow. When completed, this system someone else in the company’s primary responsibility and move on to the next stage. Delegating this responsibility to someone else is critical!
Stage 2 of the growth cycle is the Survival stage. The goal of the survival stage is consistently achieving owner established profit requirements.
You shift your focus at this stage is to profitability. Someone else is now responsible for assuring you “cover your nut.” Now it’s time to focus on getting a return on investment (ROI) for your time and money.
Again, focus your attention. Begin creating systems in your business that consistently generate profit. Your level of business acumen needs to increase at this point. If it does not your business will stagnate.
This is where many small business owners get themselves stuck for 1 of 2 reasons! Either their business knowledge isn’t sufficient to move beyond this stage. Or, they haven’t created the necessary systems so they can handoff this responsibility of creating consistent profit to someone in the company like in the existence stage. The result is they get stuck!
If you feel like you are stuck contact us. Our business solutions are designed to get companies unstuck and assure startups don’t get stuck in the first place!
You achieve business success on top of your personal success when you achieve stage 3 of the growth cycle – the Success stage. The goal of the success stage is deciding do you want to sustain the current size of the business and step away for your business OR enter the Rapid Growth stage.
At this point you have all the systems in place. You may have already even hired someone to manage the business from you – your successor.
This is where business brokers love to see a business when it comes time to sell. The cash flow thrown off by the business is not dependent on the owner. The business has real value! A business like this is easy to sell!
But, let me ask you another question. If your business will run by itself, why do you need to sell it?!! You don’t but the great thing is that you have a choice. Most small business owners don’t have a choice. If they cannot sell their business, they’re stuck and cannot retire!
So there you have it. Achieve the 3 stages of the growth cycle and you’ll create a self-sustaining business. A self-sustaining business creates business success which gives you choice. Choices you probably don’t have now. But, the choice of financial freedom was probably one of the reasons you started your business in the first place!
If you want to get started moving your business toward the success stage I recommend that you download our FREE Do It Yourself Guide to Business Growth eBook. If you want a little more personalized assistance getting there then we recommend our small business coaching which will help you navigate all the transitions you and your business will encounter along the way to becoming a self-sustaining business!