In Stage 1 (Concept and Startup), we need money. To get money, we need clients. So a Stage 1 business teaches us that it's all about making money via Sales.
In Stage 2 (Survival), we've been mucking along for a while and the outside funding is beginning to dry up. We need money even worse. To get money, we need clients. So a Stage 2 business confirms to us that it's even more important to focus on making money via Sales.
In Stage 3 (Subsistence) we finally have done enough sales to get enough clients to break even. But we have to produce for these clients, because if we don't produce, we don't get paid, and we need money. So a Stage 3 business teaches us that we have to focus on making money via production, or our Craft.
And finally, a Stage 4 business (Stability by Hands-On, focused on the producing the "Craft") allows us to buy a hot tub and go on vacation a couple weeks a year, confirming to us that the owner's purpose is to make money.
But what our business taught us in these first four stages is exactly what keeps us on the treadmill for 30 years and never lets us off. Our business taught us that we should make money, and it is that misconception that keeps us from building a business that makes money when we're on vacation. We're on the treadmill of making money.
Unfortunately our bias toward the treadmill of making money is confirmed as we look around and see most other businesses stuck in Stage 4 as well. So quiet desperation sets in - this must be all there is. And to add insult to injury, at some point we realize that if we had stayed at IBM, we could still have bought a hot tub and gone on vacation a couple times a year, except in that case we would not have lost money while on vacation or had to wake up nights wondering how we'll pay off the debt we incurred in Stages 1 and 2.
Why did we do this? How was it worth the trouble and the responsibility we've taken on? Why did we decide to buy a job and become employees of ourselves?
We did it because 1) our business taught us to make money, and 2) we see that most other small businesses have gotten stuck on Stage 3 or 4, confirming that this is actually normal.
Stage 3 and 4 are not normal at all, they are merely average. Most businesses have stalled there, but the normal business will break through to Stages 5-7 and make money for the owner when the owner is not there.
Stop being an employee of yourself, get off the treadmill, and get back to the passion that brought you into business in the first place. Next week we'll talk about the clear simple actions that will allow us to do just that.
Author of the Number One Business Book, Making Money is Killing Your Business
Make Your Own Business Rules