The Five Stages of a Business

Formulation

In this stage, perform a brain dump about all you are doing, thinking, and planning about your business. You put together business plans, budgets, marketing plans, recruiting plans, economic forecasts, etc. You commit to paper everything you can think of about your business.

Concentration

Concentration is characterized by lots of energy and activity going out but little coming in. For every ten actions you take, only 1 produces a result. You’re not spinning your wheels because your actions are on purpose and designed to keep your business running. It’s just that you’re expending much energy with very little to show for it.

If you’ve ever had to jump-start a car by popping the clutch, you know what I mean about concentration. Remember how you got behind the car, which was at a dead standstill, and pushed and pushed with all your might, but the car barely moved?  You put out a lot of energy and hard work with minimal results. The car just barely began to roll forward. But then you entered Stage 3.

Momentum

Using our car analogy again, momentum is where you still apply energy and effort, but now you’re beginning to see results. The car is starting to move. It’s picking up steam. You’re still struggling, but the car is moving faster and faster, and it’s getting easier to push. Instead of 10 actions, momentum is now to produce one result, 7 to 1, 5 to 1, 3 to 1, and so on.

More phone calls are being returned, connections on Social Media increase and individuals are starting to recognize you. You’re putting out advertising, and more people are responding. You’re going on sales calls and closing more sales. You can feel the momentum building.

Stability

In this stage, your business has become fairly stable and predictable. You know that if you do certain things, customers will show up. Ads produce a steady stream of clients, cold calling or prospecting gets so much business, etc. If you go on x number of appointments, you’ll close y number of sales. Your conversion rates are steady and predictable. It’s one action out, one result in.

Breakthrough

If you reach this stage (and I say if because, in my experience, few businesses ever get here), your business takes off, often in unpredictable ways. The phone is ringing off the hook. Your seminars are filled to overflowing, and you’ve got so many client appointments you can’t keep track of them. In fact, you’re getting calls and leads from the proverbial “out of the blue.” Someone’s aunt’s brother’s cousin’s sister calls you, and you can’t even remember where you met the first person in the chain.

Business cards you left at someone’s office months ago fall into the hands of someone you don’t even know. They call wanting a meeting as you are the answer to all their problems. On some level, you could almost say you’ve got too much business. You must generate new structures and systems to handle and manage it. It’s almost like going back into formulation again because, in essence, you’ve got a totally new business different from the one you conceived back in Stage 1.

Overview

These stages are linear, and if you skip over one, you usually pay the price somewhere down the road.

If you don’t formulate and go into concentration, you’ve got a lot of activity but no direction or purpose. It’s random and ill-conceived.

If you don’t do the legwork of concentration, you’ll miss valuable learning experiences and insights that only come from hard work and perseverance.

I have occasionally seen clients in the real estate field go from momentum to breakthrough (a quick explosion of leads and appointments and listings and buyers). They get so wrapped up in servicing those clients that they stop prospecting and lead generating. Then when things calm down, and all those houses are sold, and buyers have found homes, there’s no business, and they must go back to concentration again, hitting the phones, walking their farm area, etc., and it takes them 2-3 months to get back to building a stable business. So be aware of following the model one stage at a time.

Brad Warren, Land Banking Consultant @ https://www.linkedin.com/in/bradleykwarren/