S-Curve of Business: Stage 2

ConcentrationToday we’re talking about making your dream into a reality. Welcome to the second stage of the S-curve of business: concentration. Here, you turn your attention to how to implement all of the ideas you generated during formulation (Step 1). So if you haven’t completed stage one, there’s no way to move on to stage two.

So why is Stage 2 so important? Well concentration involves building value for your organization. This means understanding:

Market Alignment – This is obtained when a business consistently delivers a compelling value proposition in a simple exchange. Misalignment happens when an entrepreneur has little or no contact with customers. To avoid this, the values and behaviors of the entrepreneur need to be systematized into the operations of the business.

Management – Outgrowing your original management team is an extremely common occurrence. This causes an entrepreneur to pause at a critical junction and ask the following question: Do you continue to dance with the ones you brought? The management principle will allow you to address the changes you’ll need to make in order to grow your business.

Model – This is a theory of how the company will operate in a profitable way in the future. You have to decide whether or not you have a scalable business model. In other words, are you testing and developing continually to ensure profitability as your business scales upward?

Money – The fuel that drives growth! There is a limit to the amount of growth that can be funded based on the margins in the business, as well as capital intensity. The answer is to have a profitable, asset light business model and enough cash to carry you through a controlled growth period until professional and strategic debt and equity money is available. To break it down into simple terms, you have to follow the money trail!

We’re not going to lie to you. Concentration is hard work, mainly because you’re putting in lots of energy to make your dream a reality, but you’re seeing very little return. To be completely honest, this is usually the stage when most entrepreneurs give up. You have doubts and sometimes, you believe your doubts.

Here’s a tip: even if it’s hard, keep concentrating on making it happen and moving forward. Often, we think it sounds weak to say something is hard. It’s not. Saying something is hard can simply be an observation which allows you to focus on pursuing your goals.

So stay the course. After all, by taking time in the concentration stage, you’ll have great navigation to bring your business into stage three: momentum. Stay tuned!

2 comments on “S-Curve of Business: Stage 2

  1. […] up … before you continue, have you read about Stage 1, Stage 2 and Stage […]

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  2. […] get confused. Read about Stage 1, Stage 2, Stage 3 and Stage […]

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