Stage 1: Starting Up a Company?  Embrace the Chaos.

Starting Up a Company?  Embrace the Chaos.

Starting a business has never been easy; the beginning stages of a new venture can feel like a whirlwind of chaos and uncertainty. An entrepreneur needs to have courage and confidence to navigate these stormy waters. Understanding the stages of business growth, and how companies progress through these stages, is essential for any entrepreneur hoping to thrive in the chaotic beginnings of starting a company.

As a Stage 1 - or Start Up – passion and guts are the fuel.  To envision a company where none existed before and to transform that vision into a living reality is not a simple task.  The key objectives at the Start Up stage include:

  • Creating a cohesive, cooperative team

  • Embrace the chaotic environment

  • Generate and preserve as much cash (revenue) as possible

  • Focus first on Profit, then your People, and lastly Process

Innovate Quickly – Discover, Explore, Experiment

A Stage 1 company should be structured to innovate quickly; it is not designed to be locked into any one specific focus at the beginning. A Start Up company is meant to quickly discover, explore, experiment and find the right product or service that the company intends to bring out into the world. 

Stage 1 is comprised of businesses with 1 – 10 employees.  At this Stage, you do not have a lot of people to lead. It is more about making quick business decisions and embracing the inherent chaos.

Stage 1 is about survival; it is about getting a product or service out to the correct target market. As a Stage 1 company, you are better off if you hire people based on how they fit into your organization, rather than strictly for their level of competency. Be sure to look for generalists who can wear multiple hats.

The Rules

In order to grow your company into Stage 2 without losing your mind or stagnating in Stage 1, you must abide by and implement the Non-Negotiable Rules. Some of the Non-Negotiable Rules for Stage 1 are:

  • Focus 80% of your resources on selling 2-3 of your highest margin offerings.

  • Set in place a basic Customer Relationship Management (CRM) system.

  • Generate, track, and preserve cash.

  • Create a basic monthly KPI Flash Sheet.

  • Embrace the chaos inherent to a new organization; develop process only where necessary.

  • Command the team and inspire the employees.

The proper implementation of these rules could be the key element that defines the success or failure of a Stage 1 company.

The Leader Must Change as the Company Changes

As a company grows, so must the leader.  Each Stage of Growth requires something different from the leader.  Understanding what is required of you as your company evolves can either propel the company forward or cause the company to become ‘stuck’ – profits never materialize; sales suffer; and there is high employee turnover. 

In Stage 1, your business needs you to be a leader that guides the team with a strong vision, focuses on people’s potential, and takes charge to lead the organization through chaos.

As the leader of a Stage 1 company, you should be spending at least 40% of your time in a visionary mode – you need to provide your team with a vision of where the company is going and how you are going to get there. A Stage 1 company is CEO-centric – meaning the CEO is likely the ‘specialist’ who has created a product or service and is now getting their idea to take shape. Therefore, 50% of your time should be spent as the technician or the specialist while only 10% of your time will be spent as a manager.

What’s next?

Where survival is the name of the game in a Stage 1 company, that’s not the case going into Stage 2.  Now it’s all about growth.

Next: Stage 2 – Ramp Up.