Some entrepreneurs want to wait until everything is finalized
before they dip their toes into the actual startup. Others are
more comfortable with ambiguity. But the fact is, no matter
how much you plan, there will be a lot of surprises in startup
But creating a plan, and sticking to it, is how most successful
companies manage to grow in predictable ways. As most of
you know, I call these the 7 Stages of Business Success.
The first stage is planning and development. And once you
have just one paying customer or client, the company
catapults into Stage 2, the Specialty Stage.
Once the company has made a single sale, the owner has
officially created a job for themself. That initial sale pushes
the enterprise out of the concept stage and into the tasks
and to-do list phase. It’s time to run a real business.
Stage 2 is the Time to Build a Reputation
In these early days, it’s time to hone your skills and become
known as the best in your industry. So look around and study
your competitors. How can you be more knowledgeable,
additionally certified, better qualified, or a cut above the
In Stage 2, the owner needs to work out the most effective
ways to be seen as the best choice. Credibility is essential for any business’s long-term success, but it’s also critical for
short-term profits. After all, you’re the new kid on the block,
and you have a lot to prove. You are the leader of the firm, so
you must be superior just to keep up.
Don’t dismiss the value of accreditation. If you need to get
certified or take classes, do so. Make sure you have the
highest professional credentials available. Whatever is
required to be considered highly proficient, do it now.
For some business owners, that will mean taking more
classes or acquiring new initials for their titles. But some
entrepreneurs can use exceptional experiences as proof of
superiority. For example, if you’re a former Olympian opening
a gym, promote your story as a unique qualification. The
same principle applies to an ex-White House housekeeper
opening a cleaning service or a plumber who apprenticed at
the Empire State Building. If you’ve encountered special
events or challenges that make you better suited or more
experienced, your customers should hear about it.
This is Also the Stage to Get Obnoxious
Lately, I’ve been talking a lot about obnoxious offers (it’s the
topic of my next book). When a business owner thinks about
what customers want–that no one else is bothering to give
them–and then figures out how to deliver on those needs,
that’s an obnoxious offer.
Stage 2 is the perfect time to develop your own obnoxious
offer. After all, you probably already know what your
competitors are doing wrong or what your customers wish you would do. So why not find a way to address these unmet
For example, in my first business, a commercial landscaping
company, I discovered that missing deadlines could make my
clients lose money. That’s why I created a premium package
that guaranteed on-time completion and included a one-year
warranty. For a 30% premium, I would ensure the job would
be finished on the agreed-upon date. No excuses. I took some
risks to offer this guarantee, but my customers loved it and
lined up to pay more.
I also got a lot of business based on a much smaller promise–
all calls returned. Many guys didn’t bother returning calls, so
people were impressed when I returned every call. That
simple promise was a foundational part of creating a million-
Obnoxious offers are ways of telling people you are the best.
Think about the factors involved in your customers’ purchase
decisions, identify a real pain point, and remove it. Every
business is different. But if you eliminate frustrating barriers,
you’re way ahead of the game.
Is Stage 2 Where Your Business Wants to Stay?
Some people like to stay in Stage 2 and maintain a hands-on
role. They remain both the owner and the star of the show.
Other entrepreneurs move on to other business models. One
is not necessarily better than the other; both strategies can
be wildly profitable.
For example, Billy Joel is still in Stage 2 of his business model.
He is the star. Who wants to attend a Billy Joel concert with no Billy Joel? If Billy Joel sourced his job out to another
musician, the value of his recordings and concerts would
plummet. In this model, when Billy Joel stops performing, he
essentially closes his business. If he wants to continue
making money, he will need to change his business model in
ways that don’t depend on his personal and ongoing
You may think that all music acts have to be a Stage 2
business, but that’s not necessarily so. Mannheim
Steamroller is a set of musicians, run by a management
team, who can play worldwide, sometimes in two or more
locations at once. No one pays to see a particular musician.
Instead, concert-goers pay for an experience.
Understanding Business Stages Helps You Grow
Understanding how businesses grow and what’s critical to
improve in each stage puts your business on the path to
predictable growth. For more information, check out my
book, The 7 Stages of Small Business Growth . This
volume explains how businesses expand, ways to manage
development, and how to sequence growth in ways that
maximize momentum and profitability. Or email me
at [email protected], and let’s talk.