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Glenn Mattson
Hey everybody. Welcome back to the Building Blocks of Success podcast. This is where we're going to explore the mindsets and strategies, and the key concepts needed to be successful in business. I'm your host, Glenn Mattson, and I'm excited to dive into today's topic, which is the five stages of entrepreneurial growth.
Entrepreneurship is not a one-size-fits-all, right? The term entrepreneur can describe someone who's building a scalable startup, a large social media enterprise, or a small business, the majority of the individuals that we'll be dealing with are starting that small business. Regardless of the type of business you're growing, every entrepreneur goes through what I consider five stages of growth. Now that doesn't mean they all go through it. That means they all have the capacity to go through it. Many never get past stage three. The key to our session today is not to know the stages or where you are, but to understand the mastery of the specific skills that you may want to learn how to thrive so you can thrive within that stage. I'm also going to share with you as we go through this season, in great detail each of those stages. So today is an overview. In the future sessions, we're going to dig deep into every single one of these.
Someone who spent close to 30 years coaching entrepreneurs’ keynotes for groups that are small, all the way up to 7000 people, 8000 people, training countless business owners, and countless salespeople. See firsthand, the path of entrepreneurship is not a straight line. It's a journey that's really filled with highs and lows, wins and setbacks, emotional highs and lows, financial highs and lows, each of them with its own challenges, lessons, and opportunities. I want to share with you what these five stages are so you can see where maybe you fit.
Think of this as more of a navigational roadmap of the entrepreneurial landscape, whether you're just starting to build your business, or do you already have one's leading a team. You have executives below you and teams of individuals going to help identify where you are. What are you doing and what do you need to do to get to the next level? The beauty of understanding these stages so they comply, really, to everyone from a solo entrepreneurial working out of his garage, all the way to partnerships with 100 to $200 million practices. Each stage requires different skills, a different mindset, more importantly, a much different willingness to grow. Before we dive into the details, let me explain why the framework is critical.
Entrepreneurs often face uncertainty. It's easy to get overwhelmed by all the moving parts, finding customers, managing cash flow, right, scaling it, building teams, dealing with, quite honestly, sometimes playground stuff, people not getting along. It's just exhausting sometimes. But if you can identify what stage you're at, where you are, and then you can start to understand maybe some of the things that you can do to grow. Maybe this is the time, the season to listen to how you can overcome the roadblocks. Maybe it's to help you stay at the stage that you're at, but just to have a lot more free time and less stress in that stage. All five stages of entrepreneurial growth are really designed to help you focus on the right things at the right time. In the early stages, you're obviously in survival mode right trying to get your business off the ground. As you progress, you shift from working in the business to working on your business, and eventually, you're going to move into a leadership role where the focus is less about the day-to-day operations and more about the vision and your strategy. Let me be clear, every stage has its own set of growing pains. You will face hurdles, whether it’s figuring out how to generate revenue, learning how to delegate, giving up control, hiring the right people versus your friends, navigating the complexity of teams, or compensation, the key to success, is embracing those challenges as an opportunity to grow.
So, let's take a look at this episode and walk you through each of the five stages, five stages of growth real quick. Let me tell you what they are. Then we'll come back. The first stage is an emerging entrepreneur. The second stage is developing an entrepreneur. The third stage is the rainmaking entrepreneurial. After stage four, very few get to but those that do, you're now at the CEO entrepreneurial level. Finally, we get to the mayor level. So, what are these? Right? The emerging entrepreneurs. When you're focused honestly on surviving and building the foundation of your business and revenue, a developing entrepreneurial, it's really where they understand their swim lane. They understand about growth, consistency, who their clients are, what the issues are, and how to solve those problems, rinse and repeat.
Now realize each of these stages, besides emerging, is indifferent, based on time, tenure, and income. I have multi, multi, and multi-millionaires whose business would be considered a developing entrepreneurial, the developing entrepreneurial, again, smaller in size. We'll get into this in detail later, smaller in size. Typically know who your clients are very well. What the problems are that they have, how to communicate, how to have conversations, how to sell. It's called the lifestyle business. The rainmaking entrepreneurial is really where they understand that there's time to scale and lead a team which always has its fun and issues in there. I always find it interesting when people can't even manage themselves now, they're trying to figure out how to manage others.
The fourth level is the CEO or the entrepreneur. This is where leadership and strategic decisions really become your primary focus. The mayor, the mayor is where you're the visionary leader. You build something and it can survive without you. Without you, had one of my clients say, you know, this feels like I'm a grandparent. I show up, I recognize everything, and all the values that I had are still here, but when I leave, I don't have to worry about so and so, going to go to bed on time, so and so, going to go to grade. I don't worry about those things anymore, because that's your job. So, think of the mayor, almost like the grandparents. As you listen to me describe each of these stages, I want to ask yourself, where am I right now? Where am I on my journey? What challenges am I facing that align with the stages I'm in? What do you think I need to move forward with or focus on? Each stage demands a different version of yourself, and the ability for you to grow through these stages is what separates successful entrepreneurs from those who plateau.
So, let's talk about each of these from a big-picture standpoint. Real quick, the emerging entrepreneur, honestly, this is the first chunk of time starting the business. It's almost the same image, an image of your house on fire. You decide to run inside and figure out if you can grab stuff before the house comes down, you're laying the foundation. The goal is simple, create revenue, and get your business off the ground. It's not easy. You have to face fears, failures, and obstacles. You have to get stuff done for law, legal. It's a lot of stuff to get done. Yet in this phase, failure really becomes one of your greatest teachers. For later, you must learn how to market and sell and be consistent, even. At the intensity of unknown failure. Emerging entrepreneurial for many of you is about getting in front of enough people, converting enough of that into revenue, and maintaining that consistently so you can survive.
Some of you are part of a larger organization where the IT, etc. is not that big of an issue. For some of you, you're spending way too much time doing that and not generating revenue. I have a client of mine when he decided to open up his own business, he literally hired six or seven people, and I understand this is different for many of you. He hired an IT person. He hired an accountant. He hired, and he just said, this is what I'm doing. I need what I need. All he did was go out and start calling up clients and customers and started having sales calls. By the time the attorney was done, and the account was done, he already had great revenue coming in. So sometimes as an emerging, one of the mistakes is you try to do everything yourself, and you spend too much time doing what we call no pay time activities. No-pay time activities are things that are important, but they don't create the revenue that you need to get done.
So, emerging is a very scary time. A lot of stuff going on. Many plates are being spun, if you don't have your eye focused on what you need to work on, you spend a lot of time working on the wrong end of the problem. The next phase is the developing entrepreneurial. It's one of my favorites. Development entrepreneurial is once you've established your footing and you kind of understand who your clients are, you understand what their issues are, and you understand how to solve those issues. Do you have a pretty good run rate, which is, it's just consistency, seeing the same people, same issues, same problems, same solution? You know your talk tracks. You know how to do all the paperwork. You know what the product is.
You got all that past you. You may have a couple of people working for you. Hopefully, you start to understand that your time is very valuable. See some developing, developing entrepreneurs. They live in the world of well, I'll just do it because it's easier. No, they're just doing it because they're being cheap. Always better off hiring people to do your no-pay time activities. So, the only thing that you do is the highest generating of revenue. So, developing entrepreneurial delegation is critical. Start to understand how valuable your time is. Definitely, my entrepreneurials, they start to understand something that as they start to get clarity on their clients, their customers, who they are, what they need, and how to serve them best. Many of them get stuck right here. Many businesses get stuck and then develop it. So, when we look at the developing, they've learned things like hopefully have stopped making excuses by now, and they've understood how to fail. They're doing a little bit all the time, but you have to realize they understand who their clients are.
Like this one individual I was talking to this morning, he sells to dentists. He knows when he goes to talk to him, he knows what their problems are. He understands what product they're going to buy. He even knows how much they're going to spend on it. He could put 50 people in the room and honestly do an avatar, one on one, and he would close a lot of people. All he has to say is the same thing, the same way, to the same types of people, and he has a high, close ratio. Now he could actually bring in more staff. Could he hire people and develop a team, perhaps a bloody so much market share that he can go after? Yet, when you ask about bringing in someone else, bringing in another salesperson, bringing people in, this is the common plague of a developing entrepreneurial. I'm doing pretty well right now. I'm not sure it's worth the lift.
Now a rainmaker. This is where all the chaos and fun happens. Stakes are a lot higher. You are moving quickly, noticing that if you had someone doing your pay-time activities, assuming no paytime, you'd be doing much better. You hire someone to do your scheduling. You hire someone to potentially do paperwork. You hire someone to do the other type of paperwork. Maybe you will start to hire someone to get you prepared for meetings. It's a rainmaker. You're starting to understand the profitability of your time. You're trying to figure out how to maximize that, so you are scaling. Now, what you're trying to do is manage a team. Still. You're still responsible for generating new business and revenue, but you also now need to lead, mentor, train, and coach others.
A lot of times you're the player-coach, you're producing, you're managing, and they look to you for leadership. A lot of things are important in this stage, and we spend probably a good two or three sessions in this one area. But realize a rainmaker is they have a growth mindset. They work really hard to achieve where they are. They have staff, and many of them, they're very beginning. Quite honestly, they just hire people. They don't even know what they're doing. They don't even know how to bore them. They don't know how to train them. But they know, if I have more people, I can do more business. Spend a lot of time in this section, because many of my clients are from the Rainmaker stage, yet they think they're not. They think they're ready to have a succession episode happen in their practice that's not going to happen in the Rainmaker phase.
One of the characteristics here right is to shift and make sure that process procedures are systematized. Without the right processes, your growth is going to stall. You have to remember what we talk about all the time. The key is predictability. Predictability creates consistency. Consistency creates predictability. Predictability creates scale. Never forget it. Rainmakers also realized in the beginning that staff is an expense until they realize it's an investment. Now their mayor, excuse me, the CEO is really interesting.
CEO is stage four. Not a lot of people get to stage four. Not a lot of people can't be the Superman, Superwoman center of attention, the one that brings in all the revenue, which is the Rainmaker. Very few entrepreneurs make it to this level, which is the CEO. At this point, your role shifts from being a producer to now a true leader. This is huge. You're no longer about I, it's about, we see entrepreneurial Rainmaker, the world is about me, everything they have in the business, everything they get in the business, is supposed to be around them to support them and make their life easier so they can go out and do more.
As a CEO, entrepreneurial, your job no longer is the company cannot be “I” based it can't be the company must be we. That's a very difficult thing to talk about, and we're going to spend a lot of time on that because you've trained everybody in your office, the culture in your offices. If anything needs, like big stuff, big decisions, big questions about personnel, follow through, etc., they come to you. So, all roads lead back to the founder. You got to cut that, um, biblical cord. So, the CEO is more about “we” than “I”. Their focus is about building culture alignment within their teams, strategic initiatives, strategic decision making, making sure that their leaders are becoming the best leaders possible.
Really, about 30% of the decisions for the firm come from you. Say that again, 30% of the decisions about the firm, about the people, about what's going on, are made by you. Rainmaker is way higher. CEO, less than 30. Time you've empowered the team to handle the rest, you're more of a sounding board, a guide, a Sherpa, than anything else. Your daily focus kind of goes from daily operations to now, long-term strategies, and culture. Where are we going? How we're going to get there. Developing your second tier. You want to make sure that the second tier is strong. The stronger your leaders are, the faster you can get to the next level, the last layer level is the mayor.
The mayor really is the pinnacle of what I consider entrepreneurial success. You lead by example. Your values are ingrained in every part of the organization. People look at you as a mentor, and your focus shifts and maintaining company culture guiding the larger decisions and the blind spots behind the scenes. You're no longer just a CEO, and quite honestly, in some respects, you're no longer a CEO. You're the grandfather of the firm. You're the one who provides wisdom and vision while delegating the day-to-day stuff to someone else or a group of people. So, whether you find yourself on this journey wherever stage you are, remember that each of the stages has unique opportunities and challenges. The most important thing is to recognize where you are and embrace the stage that you're at. Listen to the next handful of podcasts, we're going to give you some ideas on how to become more efficient in that stage and or prepare yourself for the next phase.
The entrepreneurial path is a long one. It's very, very rewarding to those who commit to the process. I have an individual that we've been coaching for three years. He's doing great. Scott is at the point where his practice is getting close to being out of the Rainmaker area. He's hired substantially the right people. He's had to make really hard decisions on personnel systems are put in place. He's doing less and less of the day-to-day activities. I have another client that wants to be the CEO. He's ready to be the CEO. The problem is his firm doesn't have the leadership that allows him to not be the CEO.
A very long path to be successful. I believe there is no better job in the world than being an entrepreneur, quite honestly, being an entrepreneur without walking without a safety net, it's exciting stuff. So, thank you for turning in today for our episode on the five stages of entrepreneurial growth. If you feel like you're want to know more interested in having us help you navigate through your own journey, feel free to contact us or reach out, look to some of the resources we offer through Mattson Enterprises and the Building Blocks of Success. I'm Glenn Mattson, and I'll see you in the next episode of Building Blocks of Success podcast. See you soon.
This is the Building Blocks of Success with Glenn Mattson.
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