When you first start a business you are that business’s most valuable asset.
If we grow things right, the business becomes the most valuable asset in your life.
That reversal is at the heart of the 3-cycle approach to small business growth.
In the first (Current) cycle, the focus is on growing sales and internal capacity. In the second cycle (Growth) the focus is on volume and profit, and the expansion of systems and growing a team. In the third cycle (Enterprise) the focus is on developing an enterprise with an independent management layer, that generates passive income for the owner.
The approach is simple: once we have confirmed the market is interested in what you have to offer, our priority is to delegate relentlessly.
The first part, confirming market traction maps onto what Les McKeown calls ‘Early Struggle’ in his excellent book Predictable Success. At this phase we test if you have a business at all: does anyone want what you have to sell?
Once that is established, we improve your business by delegating. It becomes a repetitive cycle of growing capacity (largely talent and systems) and growing demand (market share) in a challenging, often stressful see-saw motion that goes on for several years.
How do you know when you have ‘arrived’?
Our definition for the ‘right size’ of a small business is simple.
Your business is the right size when everything that needs to be done is getting done, and everything that is getting done is getting done by people who enjoy what they are doing.
We work on the assumption people who are doing what they enjoy are generally working from a place of strength. Usually people who hate doing bookkeeping suck at it.
Along the way on this journey the owner must see increasing financial return on less time invested and an increasing amount of time leading the business instead of driving it from within. The rhythms for the owner slow down as the earnings pick up.
How long should all this take?
The Current Cycle, or Mckeown’s “Early Struggle”, typically last from 1 to 5 years.
If you are doing things right, by year 5 you should be developing good systems and a small team to delegate to. You are in the Growth Cycle.
When your systems are in place, and you start to see a decline in the need for you to be present every hour in your business, you are in the Enterprise Cycle. If everything goes as it should and luck is largely on your side, you could be there by year 10.
How long it really takes depends on when you start focusing on growth, and the level of risk you are comfortable with. This is an investment strategy. Get in early and take smart risks.
At the Great Performances Group we improve the success of small and medium business anywhere in the English-speaking world. Check us out to find out how. Read Clemens’ book “Great Performances – the Small Business Script for the 21st Century.” Leave a comment or question! A Facebook “Like” is sweet too.
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