Growing a company without a business coach can be a real struggle
Business coaching for growth has been talked about for years, but not often with true focus on anything more than just “doing it all a bit better”. We feel it’s time to shed a little light on the bigger picture and change the way that coaches operate too!
There are several stages to business growth, and the output of these stages has been defined in many different ways by many different authors.
Robert Kiyosaki (author of Rich Dad, Poor Dad) in particular focused very much on the way different business owners either achieved wealth or didn’t based on the way they managed their companies and finances. He linked this to the way they thought about finance, and created four different personas to demonstrate this.
The Employee persona was focused on exchanging their time for an employer’s money. They spent almost all of what they earned as their income rarely exceeded their cost of living.
The Self-employed persona included most small business owners, as it represented the situation where a person had employed themselves within a business structure that they owned. Their rate per hour was marginally better but any benefit was often countered by the risk and stresses, and additional working hours required by most micro and small businesses. Again, their income was almost always similar to their expenses, and any savings were modest in real terms.
The Business owner persona really refers to those who had achieved the situation of owning a genuine asset business. One that not only paid their direct wage comfortably, but also allowed them to employ, and benefit financially from the employment profitability of selling other people’s time to their customers for money.
The business owners referred to here were able to achieve substantial wealth as a result of the systemisation, and scalability of their businesses. Whilst many small business owners believe that this persona represents their status simply because it uses the term ‘business owner’ (and they think they are because they have a sheet of paper that says that), the reality is very different.
Only a very few company owners actually achieve this level of performance.
The Investor Persona represented those who were financially abundant enough to be able to invest their extra capital into various forms of investment. These (as the name suggest) enable them to ‘make money from money’, often managed by third party experts, and 24/7… 365 days a year.
The 5 stages of business progression
Whilst Robert Kiyosaki’s model is certainly interesting from a wealth management perspective, there is a little refinement to put this into a business context.
Within my latest book (The Missing Business Instructions) I adapted the concept to be related specifically for business ownership in the SME market. Below is a quick summary of how that looks:
As you can see, there are 5 main phases to SME development, and it’s important to know which level you have reached in order to set relevant goals to move onto the next. Trying to leap from A to E in one go is what causes business owners a lot of confusion, and I believe it is simpler to break the process down and target one step at a time. There is more about the components which make up these stages from an operational perspective here.
1. Starting out
This is exactly as it sounds. New business owners learning what their business model is, and how to monetise it in the first period. This includes a lot of consideration of the available market, value proposition, and service / product mix to match those needs. It also involves a lot of foundation work such as setting up initial marketing, financials, sales systems, first time employees and much more.
This is as described by Mr Kiyosaki. This is where you work for yourself, and make some money, but the business is totally dependent upon you. More often than not you are directly involved in the service provision or the sourcing and distribution of your goods. In most cases, the business owner here works long hours, has many hats to wear, and makes modest earnings not dissimilar to those of an employee in a similar situation whilst carrying much more risk and stress!
3. The scaling-business
This is normally identified when a business can make use of true leverage. This is when it can take the performance beyond the limitations of a few key personnel at one location. Systems are now repeatable, and the model can be broadened to different sites, locations, audiences, or service / products. These businesses are often fast growing and have huge potential when managed well. However, they are often still dependent on the business owners for strategic input or intellectual direction.
4. Owner independent business
This is when a profitable business changes into a valuable one. You see, the valuation of a company is heavily linked to it’s reliance upon the owner or other individuals. If the business can operate and grow without the direct involvement or steering of the owner, then it is a standalone profit factory, and this makes it highly desirable by investors (which is very different from being desirable to other technicians!).
5. Exit ready
Finally, the exit ready business has all the facets of the owner independent business, but has been prepared for easy handover, and has gathered together all the data to ‘prove its case’ to the potential investors. The financials are well documented, the critical profit drivers and systems are clear and unambiguous, and the proven likelihood of ongoing performance is well evidenced.
What can make business progression happen faster and easier?
Simply put, access to the right advice.
Whilst there ARE many business coaches out there, there are not that many that are great at going beyond fixing issues in general performance.
At UK Growth Coach we believe in taking a staged progression approach for the longer-term objectives.
Yes, the immediate headaches do need dealing with, but it’s good to know that isn’t the ultimate goal. Taking a plan from ‘short-term profitability focus alone’ to ‘achieving long-term capital payout in addition to strong profitable performance for the duration’ is a much bigger egg to crack.
Our coaches help clients define where they are at on the business progression continuum now, and what the next steps are to graduate onwards in the future.
We can help you make just the one step, or guide you right from start-up to exit. It’s your choice.
Our four primary coaching programmes are lined up with this ethos, and these are indicated in the graphic below:
The Basics programme is designed to help new business owners, or those who have not had substantial business training before to become truly functional and effective.
The Growth Programme is designed to help move up performance, and drive profitability, cash, and head towards scalability.
The Independence Programme is designed to move a highly profitable business into being semi-autonomous, and building the management team to succeed the owner’s starting roles.
The Exit Programme is all about valuation building, and the attraction of investors.
What to do if you are interested in learning more
If you are reading this blog, and have identified where you are now, but want to look at where you are going next, now is the time to take some action. Why not book yourself a no-obligation business review session with one of our coaches now. You can access their online diary here and simply get a time that suits you scheduled (this opportunity is available to any UK business owner turning over above £100,000 annually).