7 Stages to Scale Your Business & Bank Balance

7 ways to scale your business, to go from startup to exit, to go from zero to millionaire, nearly there to billionaire. So there are actually stages to grow a business, and I believe there are 7. And this comes from 15 years experience of being an entrepreneur, buying companies, exiting companies, although I've bought more than I've exited. and also being mentored by millionaires and billionaires. So let's get straight in. I'm going to tell you what the 7 stages are, and then I'm going to sort of unpick each one. So stage 1 is the ideation stage, the idea stage. Stage 2 is the startup stage. Stage 3 is the chaos stage. Stage 4 is the systems stage. Stage 5 is the scale-up stage. It's growth 2.0. Stage 6 is the legacy stage, and stage 7 is the exit stage. So, um, I don't know if you've ever worked for anyone else and you've thought maybe about starting or scaling your own business. Well, that is just a desire. And that doesn't lead to anything. The desire has to turn into a clear idea. So there's a big difference between desire and idea. Everyone desires to work for themselves and be free and have freedom and be financially free and be your own boss. Everyone freaking desires that. But most people don't create a firm idea of what that business is. Now, I've mentored thousands of entrepreneurs, and so many people say, well, you know, I want to create an online course, or I want to be an entrepreneur. That is not specific or clear enough. So you have to go— stage 0 is desire. Stage 1 is clear idea. Now, that could be in the form of a vision. So you might actually have a vision to start an e-commerce business or an information business. It can also sometimes, by the way, start from desperation. You got fired, you were made ill, there was COVID, and there were actual things that pushed you into thinking, I've got to do something to start a business. This is stage 1, but remember, desire is stage 0. And if you talk to anyone, yeah, I want to start a business, yeah, I want to work for myself, you want to be my boss— desire into idea, ideally into vision, ideally into plan. So that's stage 1, my friends. Stage 2 is the startup stage where the idea turns into a niche a minimum viable product and an actual business. So now you have a company, you have a website, you have something to sell, you have a merchant account so you can take money, and you have your version 1 of your product, which is often known as an MVP, a minimum viable product. And you start to make sales. Let's say you have an idea for a business. Let's say you're doing a fancy website and logo and brand, and you're doing some coding and building a website. That actually is still stage 1 idea, because until you've put a pound or dollar in the bank, it's not a startup. Unless your plan is to be pre-revenue, because maybe you've got to build IP or build software and so you, you know, you need money to fuel that, in which case you're going to be a pre-revenue startup. So stage 1 is the idea stage. Go from desire to idea through vision or desperation, and then you move into stage 2, which is the startup. You have a minimum viable product, and once you've started to make some sales, you have a business. Okay, stage 3 then is what I call the chaos stage. Now this can be good chaos or bad chaos. So good chaos is we're making sales here, but shit, we haven't got any contracts, or oh, we've got to deliver it now, or oh, you know, um, we're getting refund requests, ah, you know, I've sold it, now I've got to deliver it. And you know, you're making sales and it's causing high-class problems. But also you can get to that stage in stage 3 when the sales are coming in where you're unsystemized, you get breakage, you get complaints You get legal issues, you get too many refund requests because you've created a minimum viable product and it's not perfect and it's not tested thoroughly. Now, depending on your business depends on how quick you can set up your minimum viable product. If you are in medicine, you can't just go, yeah, well, just stick these pills in your mouth, let's see how it goes. Minimum viable product. No. But if you're doing courses and education in an unregulated industry that can't really harm people, You can do a version 1, charge a version 1 price, improve it for version 2, and up the price and up the price and up the price. So depending on the niche and the business you're in depends on how quickly you can get that minimum viable product out. The quicker you get the minimum viable product out, the quicker you can get sales, but the quicker you'll go into that first stage of chaos. The more time you take to create a more robust minimum viable product, the less chaos you have in stage 3, but it can take you 5 years to start the thing in the first place. So you've got to balance this up. Now in stage 3, if things ain't breaking, you ain't selling enough. So what a lot of people who are doing what I call active procrastination— so, um, people convince themselves that they're busy. I'm doing the website, I'm doing some coding, you know, I'm reverse engineering, I'm split testing. And you know, they're doing all these things, but in reality what's happening is they're actively procrastinating. Which means they're avoiding sales and marketing. So in stage 3, the, the first stage of growth, the chaos stage, you need to be focusing on sales and marketing. Marketing generates the lead, sales converts the lead into revenue. Both are important. Now when you're starting, there's only you and you may be doing 5 or low 6 figures, you might be marketing and sales. You might be, but you might not be. But what you want to quickly do is get yourself out of the equation and build a sales team and a marketing team. But that's sort of between stage 3 and stage 4. So stage 3, the chaos stage— ideally you're selling loads, things are breaking, and you get to a point where that break— that breakage becomes a bit too much, and you're winging it a bit, and you're flying by the seat of your pants, and you don't have any processes or systems or software or automation or regulation, etc. And then you move into stage 4, and stage 4 is the systems stage. So we've gone from stage 1, idea, to stage 2, startup, to stage 3, chaos. By the way, a lot of people see the chaos as the bad stage. I actually think that's one of the most exciting stages. Holy shit, look at us, we're making money! This is great! Shit, don't really know what we're doing, but it's freaking awesome! And that's okay, by the way, because, you know, no one has experienced tomorrow. Okay, but you mustn't let your clients down. You must focus on service. You mustn't lose your reputation. So when, when the cracks start to appear too much, you've got to fix them. So the problem when you move from stage 3 to stage 4 is when you go from sales to systems, you tighten things up, yes, and you get more process and consistency, but you take your eye off the ball on the sales. So the sales go down. Too much process, not enough sales. Too much sales, not enough process. Now, in an ideal world, this is what you do. In an ideal world, you already know about Stage 4 in the, in the 7 stages before Stage 3, which means that, you know, as the sales come in, you're going to need to get better processes and systems and software and automation, etc., and you can try and plan them in advance. So Stage 1, idea. Stage 2, startup. Stage 3, chaos and sales. Stage 4, systems, which is process, software, consistency, structure. Now when you're in Stage 3, the full sales stage, there's energy, there's dynamism, you know, there's sales going on in the bank. You've got this relentless dynamic culture, and that's great, but it's a bit chaotic and, um, what would be the word, like fractious and everywhere. And then you hone it all in. Oh, this is the automated process. We do things A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P. And what happens is you get more structure, which is great, but then the company can become soulless, a bit automaton, um, and it loses that flair and that energy and that vibrancy. And you have to be careful of that. Okay, and then once you've processed and systemized and created a robust minimum of a version 2 or version 3 or version 17.0, of your product and everything's a bit tighter and you've got good sales process, marketing process, lead flow, conversion, lifetime client value. You know that you could really ramp up the sales because you've got the robust systems. Then you go to the stage 5, which is the scale stage, and this is stage 3 without the chaos. So you're actually ready for growth 2.0, where you could— when you were doing tens or hundreds, low hundreds of thousands but it was chaos and madness. Now you can do millions and you can handle the volume of sales because you're robust. You're 2.0, 3.0, 4.0, and I call this the scale stage. So it's really growth 2.0 but with more experience, tighter systems and processes, so you can really, um, gain market share and you can multiply and you can increase your margin. Okay. Now, once you're in that scale-up stage, you move into stage 6. And stage 6 is what I call the legacy stage. And that is where you start to mature as a business. Your margin can drop, but you create sustainability, scalability, succession planning, um, and you start to think about, well, what's the future? Am I going to sell this business? Uh, we're just going to keep running it forever? Am I going to hand it on to management or even my children? Um, because you now have a much more mature business. So my company is in stage 6, but we have got some movements into the final stage, which I'll tell you about in a moment. So my company at the moment is 15 years old. It's the biggest property training company in the UK, one, one of my training companies. And so it's at the legacy stage where we're thinking about, hmm, my son's 11 today, it's his birthday. Do I want my kids to take over? Do we want the management to take over? I'm 43, am I going to be doing this till I'm 73? Am I going to sell? Am I going to IPO? What am I going to do? Um, now that we're at the legacy stage and we're a mature market, all the new players come in, all the little disruptive noisy competitors come in, the ankle biters come and chew at us when we were the ankle biters before. And so that legacy stage is important because you actually start to consider when you're not in the business anymore, you start to, um, look forward into the future properly, consider the business without you. And then stage 7 is the exit stage. So if you're just tuning in or you want a quick reminder, I'm covering the 7 stages of scaling a business, and I've been doing this for 15 years and gone through these, into these 7 stages. I've interviewed, what, 17, 16, 17 billionaires, hundreds of multi-millionaires. I've seen so many businesses grow and scale and exit. I've got friends and associates and colleagues who've done this multiple times over. I've read thousands of entrepreneurial and autobiographical books to build this experience and create this model for you. So Stage 1 is the idea stage. Stage 2 is the startup stage. Stage 3 is the chaos stage, which is basically sales and growth 1.0. Stage 4 is the system stage, tightening the process and the consistency. Stage 5 is scale 2.0 with better systems. Stage 6 is legacy. Which is maturation, thinking about succession and sustainability as well as scalability. And then stage 7 is the exit stage. Now, there are multiple ways to exit, by the way. You can die, that's one way to exit. You can go bust, that's another way to exit. Now, in an ideal world, you don't die and you don't go bust, and you're thinking in stage 5 and 6 how to outlive your company or how your company can outlive you. So in an ideal world, you'd either sell it, IPO it on the stock market, management buyout, um, or, you know, sell parts of it, um, or hand it on to your children as a legacy succession plan. And this is stage 7. And in stage 7, you kind of take your eye off the business a bit because now you're thinking about exiting. Um, anyone who sold a business will tell you, well, when you're selling a business, you often take your eye off the sales because you're spending so much time trying to set the business up to sell, you take your eye off the revenue because it can take 6, 12, 18, 24 months to sell a business or to prepare it for a flotation, etc. Okay, cool. So let me just do a quick summary of this then. I haven't actually shared this before on my social media, so whilst it's not new content for me, I've done it in seminars before, no one on my social media has ever seen me share this content before, so I hope you're finding it useful. Um, there are 7 stages of a business growth curve from idea to exit. Now, stage 0 is desire, because desire counts for nothing if you don't do anything. Stage 1 is the idea, where you have a seed of an idea and you turn it into a vision and you create some kind of niche. Stage 2 is the startup, where it's actually a minimum viable product, where you're enthusiastic, uh, and you're energetic, but you don't have any experience and you just go and try and start to sell some things that are imperfect, and you're imperfect, and you just, you know, as I say, I wrote a book called Start Now, Get Perfect Later. So you start now and get perfect later. Stage 3 then is you start to make some sales in the Growth 1.0 or the chaos stage. You're making sales, there's energy, there's enthusiasm, but shit's breaking. You've never really done it before, you don't really understand the delivery on what you sold. And you have to make a lot of improvements and tweaks to your products and services. And if you, if you do well in the chaos stage, you get lots of breakage because that means you're selling loads of products and services. Then you have to move into stage 4, where you have to improve the products and the services. You have to create process, consistency, structure so that you can deliver and you can scale. The problem with stage 4, the system stage, is your company can become a bit soulless and overly structured. But the problem with Stage 3, the Chaos Stage, is whilst it's disruptive and dynamic and energetic, it can be too loose and too free and too chaotic. And what you do— what you want to do is go through Stage 3, Chaos, and through Stage 4, Systems, but try and get the best of both worlds as you move through them. You should have a client onboarding process, you should have good legals and contracts and, and partnerships, you should have, you know, an end-to-end flowchart of a customer journey, you should have ideal client profiles, you should have all these these things, but it not lose the soul and the energy and the individuality and the personality of your brand. So you've gone from idea to startup to chaos to systems, and then you're going to do scale 2.0. You should only scale 2.0, which is fuel growth, pump loads of money into growth, even get an injection of cash into growth and go for big market share, when you've created good systems and processes and automation. And so Scale 2.0, Stage 5, is going to be much bigger than Scale 1.0 because you've got the resources to be able to scale. And then you can get extra market share, you can multiply, and you can increase your margin because you've got, um, you know, good economies of scale. But then once you're really starting to scale and you've been in the business a few years, you're going like, holy shit, we're a mature company now. We're not the ankle-biting startups anymore. We've got challengers who are going to us They're all energetic and we're, you know, we're a bit lethargic and we've got to think about what's the succession planning and what's the future of this company and am I selling it, or, um, we become a bit mature. What's the next generation? What's the future? How do we evolve through changing times? Because Kodak didn't evolve through digital photography and Blockbuster didn't evolve through online streaming. So you've got to think about evolution and revolution and the future in stage 6, which which is legacy. Now sometimes that happens because a founder becomes older, or they have children, or there's a big disruption like the C-word, COVID, or they finally have time to sit down and think about it because the business is in a good place. And then that takes you to stage 7, the final stage, which is the exit stage. You can exit by dying, or going bust, or retiring, or selling, or doing an IPO and, you know, floating on the stock market, or a management buyout, which is managers buy you out, or intergenerational succession where you pass it to children or the next generation. So there you go, my good friends. They are the 7 stages of starting and scaling your business, going from zero to tens or hundreds of millions. That journey, by the way, can take 5 years or 50 years depending on the brand and the company. Now I've got one more little thing to add which I hope will be useful to you, and that is if you want to scale your business, your bank balance, you're reaching your revenue, you're impacting your income, it's absolutely vital that you have multiple streams of recurring income. If you have one stream of occurring income, then you are at massive risk you're at massive risk to disruption from viruses. And, um, I mean, in, in the UK, we went Brexit, COVID, Putin. I mean, that's 3 massive disruptions in the last sort of 5 years, which not that easy to handle. So if you've got one stream of recurring income, then you're greatly at risk, whereas if you've got multiple streams of recurring income and you've got digital income as well as physical asset income, then you are protected and scaled. So when I was a stage 1 startup, I had some real estate and one income stream, which was sourcing property deals for others. When we went into stage 3, the sales stage of growth, we did training and management and buying. So I, I had 3 income streams there. Then when we systemized and scaled through stages 4 and 5, we had lettings, management, training in property, training in business. We bought a training company, we bought 2 letting management companies and rolled them up. I have my personal brand income. I'd written a load of books, we put them all on audio. I started monetizing social media, and all of a sudden the scale stage, stage 5 we, we had 7 or so income streams. Now we have 9 or so income streams, which actually also means if I want to sell the training business, I'm only probably selling about 3 income streams and I can keep about 6 income streams. So it's vital that you have multiple streams of recurring income. And in an ideal world, in the modern world, because look, the way we earn money has changed. You've got, um, young kids on YouTube making tens of millions. You've got commentators who are just ordinary people sharing their opinion on podcasts making millions. You've got these young billionaires in cryptos. You've got people minting NFTs. You've got kids minting NFTs. And you've got this— all these new ways to make the fastest money ever possible. Why? One, because the speed of the internet and Moore's Law of, um, compounded growth of technology. 2, because we're all completely globally interconnected now. Like, I'm currently live streaming on Clubhouse, Facebook, Instagram, and TikTok, and I can live stream out to people in most countries in the world. So we've got this extra ability to create distribution and reach through social media and technology. But also, it's quicker and easier to make money than ever before because the way you make money now is mostly digitally. So for example, I've just finished a property which took me about, I'm gonna say, 5 years. A few days or weeks short of 5 full years. Yes, it has 159 tenants. Yes, it's worth nearly $30 million. Yes, it'll make about $2 million a year in income. That's kind of nice, I'm not complaining. But 5 years and millions of pounds, and I've just done a refinance and got a £12 million $12 million— no, £12 million, $15 million loan on it. So no complaints, love real estate, but that's a big project. But, um, on one Zoom to some of my private clients, um, I sold £400,000 worth of my NFTs before even on the pre-launch. And you can buy web domains that are hosted for $10 a year that can be worth 5, 6, or 7 figures. You can have followers on your social media that can buy your products and services immediately over the internet. You can invest in cryptocurrencies, which out of nowhere can create fast growth. So the key to modern income, multiple streams of recurring modern income, is that it's faster, easier, and cheaper than physical assets. So things like NFTs, cryptocurrencies, web domain names, social media, personal brand, podcasts, YouTubes, TikToks, Instagrams, and all the monetization tools and features which they give to you. These are digital assets. So if you'd love to create multiple streams of recurring income from digital assets, I have a special gift for you right now. So I'm celebrating the 6th year anniversary of my podcast Disruptors. I'm celebrating just turning 43 and the 15-year anniversary of one of my training companies. So I'm celebrating 3 in 1 here, and I'm going to be celebrating this for a few months to come. So I've got a special gift for you. If you go to the website ris.live, as in Recurring Income Summit, ris.live, my gift to you is a place on the Recurring Income Summit. I've pinned the link to the top, put it in the comments. You should be able to see it. If you can't see it, simply open a browser right now and do it while I'm listening, because it actually is happening in a few days and there's no recordings and there's no replay. So you're going to need to do it right now. But if you go right now to the link, R-I-S, recurring, with a R, R for Rob ris.live, you can claim a ticket from me to the Recurring Income Summit. The reason I'm offering this for you at no cost is, one, you can upgrade to a premium ticket if you want, um, but I don't want anyone to miss out. And also, I'm celebrating these 3 anniversaries. Entrepreneurs are terrible at celebrating. You know, we hit milestones, we're like, oh, you know, I remember I got my first Ferrari and I hadn't had it for a week and then I wanted the next Ferrari. I made my first million and then I wanted to make 10 million. And it can be a bit of a curse. So I'm going to stop, breathe it in, and celebrate with you. So go right now to the link ris.live, claim a ticket to the Recurring Income Summit. I'm going to take this link down in a moment, um, and what you'll see there is you're going to learn 5 at least ways to create recurring income from digital assets that are fast easy and low cost. You're going to learn from the founder of Netflix— the founder of Netflix is one of the keynote speakers, and I'm going to be interviewing him on building essentially one of the biggest recurring income businesses in the world. I'm also interviewing someone who wrote— no, he didn't, he sold half a billion books. He didn't write half a billion books, that would be something! I have got someone who has sold half a billion books— a billion with a b-b-b-b-b- Do you think someone who's written books knows about recurring income? So I've written 18 books, and my last— my first one was written 14 years ago, and I get a royalty check every 6 months, 6-figure royalty check for books I wrote 12, 14 years ago. So we're going to teach you social media recurring income, personal brand recurring income, crypto recurring income, NFT recurring income, digital asset recurring income, subscription model recurring income, And then content model recurring income. All of that is at the Recurring Income Summit. The link is RIS, as in recurringincomesummit.live. Right, I need to take this link down now, so make sure you go right now. It's happening in a few days' time. I don't know how many other times I'm going to have as an opportunity to mention it, so you need to make sure you go and do that now. I want to leave you with this one thought. Warren Buffett says, if you don't make money while you sleep, you will be working until you die. If you don't make money while you sleep, you will be working until you die. There is only one way to make money while you sleep. And that is through recurring income from assets. Otherwise, you have to be awake and you have to work. And that's exactly why I launched the Recurring Income Summit, so you can make money while you sleep, so you don't have to work until you die.