An entrepreneur’s journey is notoriously rollercoaster-like. No two paths are the same. Every entrepreneur starts out in a different place and time with a unique set of skills, benefits and worldviews. While journeys are different, stages share characteristics.
Knowing where you are on your journey can boost your progress. It provides clarity about where your focus should be and what you should aim for in the short term.
The four most important phases of the entrepreneurial journey
All entrepreneurs can be placed in one of four phases: execute, systematize, investigate, close. These phases form the ten-year career framework. While the time frame for completing this journey may not be ten years, it is a useful length of time to think long term and still not waste time.
Each stage requires specific focus and actions to move on to the next.
1. Run
All entrepreneurs start in the implementation phase. It’s the stage where they’re setting up, getting involved in every aspect of their business and working to prove their concept is viable. It’s exciting, but it’s hard work.
The reality is that most entrepreneurs never get past the execution stage. Even as part of a larger team, they remain critical to the delivery of some aspect of their business and are critical to internal processes.
An entrepreneur is in the execution phase when he is responsible for performing a primary function of his business. This can be in providing services directly to clients as a freelancer or sole trader, or by taking care of a fundamental internal process within a larger team. Their business relies heavily on them and would not survive an absence of several weeks without a replacement. Their team could be hundreds of people, but if they’re critical to a fundamental process or the biggest bottleneck, they’re probably in the execution phase.
The purpose of the execution phase is to lay the foundation for a successful business. Developing a product or refining a service and finding a suitable product market. The company must also discover the characteristics of the primary audience and adjacent audiences. In the beginning, there may not be enough resources to hire a team to run the full operation of the business. At this stage, the owner benefits greatly from being on site, interacting with customers and learning first-hand about the business processes.
An entrepreneur may enjoy the execution phase or he may feel overworked. When they do everything they do, they may feel stretched thin, akin to spinning plates and hoping none of them fall. Although this first leg is the most exciting leg, it probably won’t feel like that at the time, it will feel like very hard work. Execution is where most business owners are, especially since pushing to systemize is a big task and the easy option in the short term to stay in progress.
Despite the busy nature, the implementation phase does not have to be complicated. The entrepreneur simply proves his product within his target group and makes sales possible. This consists of three elements: finding the right product or service, finding the right target group for that product or service and finding the right channel to reach that target group with that product or service.
Once they’ve completed this stage, it’s time to systemize.
2. Systematize
The systematization phase is next to execution and includes the complete transition of the entrepreneur to work in the company at work On Company. This is made possible by the documentation of systems and processes that are automated or monitored by trained and trusted individuals. Essentially, all execution is controlled by other people or software.
At the end of the systemization phase, the company has processes that run by default and occasionally break, not the other way around. There is a standard way of doing things. While the entrepreneur still has a role in the business, they are not critical to the operation of the business and the delivery of products and services. They are not responsible for approving work or answering questions from team members. At this stage, the entrepreneur may feel that his business is a well-oiled machine and when they make changes, they tinker and hone. Very few entrepreneurs complete this stage.
The transition between the first two phases, executing and systemizing, can be intense and labor-intensive, as the entrepreneur may still be doing everything in his business and a central part of his business while creating processes.
Systematized companies seem to be well run companies with a clearly relaxed owner. The owner has come out of the busy execution phase and has more time available, especially because of the processes that are now an important part of the business. Franchises are examples of highly systemized companies. Everything about product or service delivery follows a structure that can be replicated in new locations. A systemized business uses automation software and has standard operating procedures (SOPs) to do everything in the business.
Systematization allows for scale and more strategic thinking, reflection and personal development, leading to the third phase of critical inquiry.
The four most important phases of the entrepreneurial journey
3. Research
Investigating is the third phase and the next next to systematization. Here the entrepreneur’s well-oiled machine runs so well that he could grow even without them. They have created a system that works, their team members are empowered to excel in their roles and the entrepreneur finds lots of empty space and moments of tranquility as their business runs and grows without their involvement.
They have a strong second-rate management, which can be clothed in some way to lead the team and run the business. These people pride themselves on resourcefulness and self-reliance, but are aware of their limitations and know when to ask for help. An entrepreneur is scrutinized when he has executed extensively, has carefully systematized and has found himself with options. Scrutinize is where an entrepreneur answers the question, “What do I want to do now?”
Control is a control point. Here the entrepreneur can decide what to do next and make his plan. They may decide to start a major project within the same or new company and go back to the execution phase at a new level. They can sit back and relax, or travel the world while their business is running. Or they are seriously considering an exit now that their company is in such a great place. If an entrepreneur has the luxury of this decision, he is probably in the testing phase.
You know a business is in this stage when you see a business owner who has a successful business but seemingly has nothing to do. Their team is self-sufficient, the day-to-day operations are all taken care of without exception. Maybe they always seem to be traveling or doing hobbies and non-work related things. They may be tinkering with fringe projects within their company. They may have assumed the role of coach or chairman of the company. Maybe they formulate their exit plan.
4. Exit
The fourth and final phase is exit. Not every company reaches the exit stage. Once a business owner has gained control, they may decide they like it there. They like having a business, they like doing their own thing and taking a dip every now and then. They are very happy to run a business that facilitates their lifestyle.
Exit is where the entrepreneur completely removes himself from the business, most likely in two ways. One is that they sell. They find a buyer, negotiate their deal, hand over and leave. The other is that they remain the owner of their business but do no part of the operation at all. They’re really out of the business, they won’t back down no matter what.
The exit phase is a favorable position that hardly any entrepreneurs reach. Here they either have a salable entity that they want to sell or a business they own and don’t run that they want to get rid of completely.
The systemization phase is key to reaching the exit phase, because without systems or documentation and processes that run reliably, a business is much less marketable. This means that it can be sold for a lower value than it is capable of, or may be required by the owner for a longer payout period, effectively hiring them by the buyer to oversee the business when sold. If the entrepreneur wants an exit, they probably don’t want a profit and want to sell their business for the highest amount it can afford.
The exit phases are usually the shortest and the most secretive. During the exit phase, very few people need to know what’s planned, in case a sale doesn’t go through or the news has a negative effect on customers or team members. Retirement (selling or stepping down completely) requires sustained effort to happen and will likely not be published until after the entrepreneur has made the exit and the succession plan has started.
What to do from here?
Entrepreneurs who want to quit, by selling or owning their business but not running it, must first determine what stage they are in. This requires an understanding of each stage of the framework and awareness of their role within their business. This creates the plan of where to focus and what to do.
Entrepreneurs who are in a phase outside the execution should minimize activities that are representative of the previous phase. An entrepreneur in systemize works to minimize the amount of execution in his daily practice. An entrepreneur under the microscope must complete all his systemization.
Likewise, entrepreneurs should not be ahead in their thinking. Only systemize when the execution phase is complete, research only when systemize is complete, look to exit only after sufficient research.
Not falling back or jumping forward or falling back brings clarity, for the entrepreneur and his company. The goals of the podium and the action required are clear. Team members are trained, trusted and not micromanaged, and the entrepreneur’s role evolves with the company being equipped to thrive without their input.
Identifying the journey in terms of executing, systemizing, scrutinizing and closing also means being clear who to ask for guidance. An entrepreneur’s support network should be made up of people in the same stage, all of whom are working to progress to the next. Their mentors and coaches, or those they turn to for advice, should be that one or two phases for them. So too with the books they read and the advice they take; there is right and wrong advice for each stage.
Following the box means knowing what to follow and what to discard so that you are ready for a prosperous life and career on your terms.
