McBride for Business Blog

Fuel for Growth: Understanding the 5 Stages of Business Growth and Development – Finding Out Where You Are and How You Can Grow

October 13, 2016 // R. Shawn McBride // No Comments »

When analyzing businesses, we often see that they go through 5 stages of business growth. Figuring out where you are and what stages are coming up, and how to order things can give you a lot of fuel to figure out what you should be focusing on next, and what are lower priorities. What are your short-term objectives, what are your long-term objectives?

Running a business can be bewildering. You’re constantly fighting this tension between “What am I doing now? What do I need to do next? And what is long-term?”, and you need some practical answers. People will tell you need all kinds of things, and you’ll be getting advice and direction from multiple different sources, and they’ll often conflict. Of course there’s only 24 hours in a day, and hopefully you’re finding some time for sleep and your friends and family, and you’re not spending every minute working on your business that you’re awake. So you need some practical strategies.

To get over this hurdle, and to help you get to the next level, we’ve put together a framework where we think of business in 5 distinct stages — and almost all businesses go through these stages — or at least aspire to. Ideally, if you’re building the type of organization we hope you are, you will eventually go through all 5 stages. Let’s take a look at them.

Step One is Preparing and Planning. You know you have things you want to accomplish. You know that you have a certain business you want to engage in. You think the market might accept it. You need to build certain skills, and build a fundamental business plan. Once you have that, then you’re ready for step two.

Step Two is Engaging in the Business and Finding Strength. Finding that “captured power” – something you are so great at that others value too that you can focus your energy on. What creates more value than the amount of time expended? Now, it’s very important on this step that you focus on your time and energy put into the business, because just making a profit off selling your time is not going to lead to a sustainable business. You need to be able to buy the help of others or you combine resources and control costs so that you can sell a product or service at a price that’s greater than what the cost is to you. You have to make it to this level if you want a sustainable, repeatable business. So value your own time and create something that’s really powerful, something that creates more wealth than what it costs. That is your secret sauce.

Step Three is Building the Systems and Making the Business Repeatable. This lays the foundation for growth, because then you can repeat the business, involve other people and make the business grow.

Step Four is Making the Business Run Without You. This is where the business gets big enough and repeatable enough that most of the business functions can be run without the owner, and then the owner can focus on more strategic-type activities. Long-term planning, strategic negotiations, targeting huge growth opportunities and redirecting the business to take advantage of entrepreneurial opportunities.

Step Five is the Self-Sustaining/Managing Business Phase. Here the business is running itself, largely without the owner’s input other than on strategic and long-term directions. The owner can focus on that, can possibly start other businesses at this point, can add strategic opportunities to the business, or can possibly even sell the business and move on to the next opportunity.

The 5 stages give you a fundamental framework to understand where you are, and in each stage, your goal should be to move into the next stage. You don’t need to look 3 or 4 stages in the future, you should only be looking 1 to 2 stages in the future and doing things to prepare you for that. Allow things to develop, and then worry about the 4th and 5th stages down the road.

I hope this framework is helpful for you, and I hope that it allows you to figure out where you are. Let us know in the comments below — what stage are you in? Where are you headed to next? What you are doing to get from this stage to the next? How can others help you get from your current stage to the next stage? And what will your life look like when you get to the next stage? I look forward to hearing from you.

This posting is intended to be a tool to familiarize readers with some of the issues discussed herein.  This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances.  This article should not be treated as legal advice to any person or entity.

About the Author

Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC. He is a frequent speaker at events and speaks to audiences on the 3 Laws of Empowerment – how you can prepare, plan and protect your business. You can reach R. Shawn McBride at or (214) 418-0258.

Posted In: Business, Growth, Strategy

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