The Dilemma Business Owners Face

This a is dilemma that every business owner is probably going to face at some point or another. It’s trying to run before you can walk.

Like when you’re at the swimming pool and you see some amazing divers lining up and jumping off the high dive. You want to be up there too, leaping gracefully, spinning in the air and entering the water with perfect form while onlookers applaud you. However, you’re not really a pro-diver, at least not yet. You actually still haven’t mastered the low dive.

But what’s the difference? They’re both diving boards, the only difference is their heights. Now you have to decide should you go off and jump from the high dive and seem impressive or take your time and develop your skills at the lower board?

In business this translates to whether or not we should try to scale our businesses before we are truly ready to handle the growth. What I have done is created a model that describes the stages of business growth as well as 4 growth structures that you need in place if you’d like to eventually scale.

Using this model is helpful for zeroing in on exactly where your business is currently at, figuring out what you need to do next to grow, and what to focus on if you want to build towards scaling up. I call it the 4 x 4 model.

This model primarily applies to businesses who are at the pre $1 million revenue stage. It doesn’t matter if you’ve been in business for one year or twenty, this model is still a good fit.

1. Experimentation

This is the first stage when you are just getting started. You need to try out a lot of different techniques and methods in order to discover what’s going to work for you. This process of experimentation usually lasts until you hit 5K- 10K in revenue a month.

2. Foundation

The Foundation stage is after you’ve gained some initial traction, you have some revenue and some customers, but largely you’re going about things inefficiently. You may be the only person working in your business and it can’t really grow past your own efforts. Average monthly revenue levels for this stage are between $5K to $25K. This is the stage where you want to start turning what you’re doing into a more standardized product.

3. Structure

At this point you need to put some structure in place. Usually this means building a team around you that will take off some of the burden you’ve put on yourself. This may mean salespeople, accountants, operations people, or even people who will help you deliver your product. There are a lot of variables here, but it’s about putting yourself in a position where you can offer your best to your customers. Revenues at this stage are around the 50K a month mark.

4. Scaling

Finally, the last stage is going to scale. This is the stage where you can 10x or more some of your processes and earn a ton more revenue.

A lot of people will try to “run before they can walk” and skip steps in order to get to the scaling stage faster. Don’t do this! You’ll get tripped up and it’ll end up burning you in the end.

Growth Structures

The 2nd half of the 4 x 4 Model is all about the Growth Structures. These are the 4 structures that are always operating to some degree even when you’re just starting out with experimentation.

1. Team Structure

This is the “Who” of who’s involved. Your team may just be you, or it could be you and some hired contractors. You probably don’t have a huge team if you’re pre $1 million, but there has to be someone who’s showing up to work everyday.

2. Customer Experience Structure

This is the “What” regarding what is the client’s experience, what results are you delivering for customers, and what do you do in order to create those results. Are you going low volume – high ticket, or high ticket – low volume? Personally, my bias is toward the higher impact / higher value options but regardless of which route you choose, the focus for this structure is what is the “transformation” we’re creating in the lives and businesses of the people you serve.

3. Revenue Structure

This one is pretty simple, you can’t have any of these other structures if you don’t have money flowing into the business. This is how you keep your team coming to work and how you are able to actually execute on everything else your business accomplishes. Revenue is the wind in your sales.

4. Profit Structure

The profit structure is concerned with what is happening with the money your business is taking in. How does it pay itself? How does it pay you? Expenses and taxes? As well as as how you keep this all in balance.

Take a hard look at your business including your numbers, and start solving the right problems for your current stage. No running before you can walk, please!


Action Steps

  1. According to your revenues, what stage of business are you currently at?
  2. If you are in the Experimentation stage continue trying out different options for how you offer your products or service.
  3. If you are in the Foundation stage create a more standardized version of your core offering.
  4. If you are in the Structure stage bring in team members that will round out your team so you can leverage your strengths even more.
  5. If you are ready to Scale, congrats, now it’s time to reap the rewards, whether that’s to step back your personal involvement, or take some risks on ideas you couldn’t execute on earlier in your growth.


Result You Will Achieve

Understand what stage of business you are in and what you need to focus on in order to grow into the next stage.

Mentor: Breanne Dyck

Founder of MNIB Consulting. Breanne Dyke’s client results speak for themselves.

This article is based on an EHQ interview with the mentor.