It was the end of 2022, exactly two years ago. My last project had failed, leaving me feeling hopeless and deeply disappointed.
I couldn’t figure out what I was doing wrong, or why every business project I started kept failing.
Out of necessity, I decided to create The 7 Business Stages Model.
Creating this model turned out to be the most beneficial thing I could have done. It helped me focus on the right thing at the right time.
I knew then that I had to share it with others, entrepreneurs who feel stuck, lost, or unsure of their next steps.
If you’re running a business but feel stuck or lack direction, this model can help you the way it helped me.
Let’s walk through each stage and understand how it all fits together.
The goal of this model
When building a business, many people, just like I did, focus too much on the big goal, which can become overwhelming.
This often leads to a lack of clarity and direction, leaving you stuck in the same place and running in circles.
The goal of this model is to focus on one stage at a time. By doing this, you’ll achieve more and have a clear path on how to move forward to the next stage.
1. Creation: The Starting of Your Business
Every business begins with an idea.
This step involves brainstorming and conducting market research to identify gaps or opportunities in the market.
Usually, there are 3 ways the business Idea is formed
- Finding Solutions for Everyday Problems: Identify small inconveniences or challenges and create a solution.
- Improving and Innovating Existing Problems: Take existing products or services and make them better or more efficient.
- Using a Skill or Passion You Have: Turn what you’re good at or love into a business that solves a need.
Your business should always solve a problem and address a real need for your solution.
If you’re selling a physical product, decide whether
- Produce it yourself,
- Partner with a manufacturer,
- Resell an existing product.
For service-based businesses, determine whether
- B2B Selling to other businesses
- B2C selling individual customers
No matter if your business is online or offline, a digital marketing strategy is non-negotiable. With 63% of the population on social media, this is where your audience will likely find you unless you’re targeting rural areas with limited connectivity.
As you move forward, details will become clearer. Remember, part of the process is figuring things out as you go. Focus on starting and refining along the way.
Don’t wait for perfection, start with what you know and adapt as you grow.
Just start!
2. First Customer Segment: Finding Your First Buyers
Once you have your product or service idea, the next step is finding your first group of customers.
This is your target audience, the people who will benefit the most from what you offer.
To find your first customer segment, think about:
- Who has the problem you’re solving?
- What do they value most in a solution?
- Where can you find these people?
Identifying your first customer segment will help you focus your marketing efforts and refine your messaging.
It’s important to know who your customers are, their age, profession, needs, and hobbies.
The more detailed your understanding of your customers, the better you can target and serve them effectively.
There are 5 ways you can reach your customers
the 3 free ways to reach your customers for free but time-consuming
- Cold Calls, Emails, and DMs: Reach out directly to potential customers.
- Content Creation and Personal Brand: Attract customers by sharing valuable content and building trust.
- Word of Mouth: Leverage happy customers to spread the word about your business.
There are 2 expensive ways to reach your customers which are quick and lead to making your first income stream.
- Paid Advertisement: Use ads to target and reach a wider audience quickly.
- Referral and Affiliate Programs: Encourage others to promote your business for a reward.
Profitability is crucial in this stage as certain businesses like startups thanks to investment skip this part and focus on scaling the business
Build a team capable of supporting the growth ahead and prepare to attract investment if needed.
Key priorities include attracting new customers, increasing the lifetime value of existing customers, and diversifying by introducing complementary products or services.
3. First Income Stream: Bringing in Revenue
At this stage, you’ll experiment with different revenue streams:
- Subscription models for digital services or recurring products.
- One-time sales for physical goods, coaching, or consulting.
- Sponsorships for conferences, events, podcasts, or newsletters.
The goal is to start small. Focus on establishing one reliable income stream before branching out into others.
The question now is how are you gonna reach your first customers in order to sell your products and services.
Many startups get investments in this stage.
They tend to jump into scaling their business without first becoming profitable.
This approach worked in the 2000s when no one really knew how to monetize SaaS or digital businesses.
Today, it’s much easier to figure out monetization strategies by observing how similar businesses operate.
Trying to scale, build a brand, and expand your business without having profitability goal put at risk the business.
Investor have clicking clock on how long can they tolerate to wait the business to take off, as their goal is to exit and make money.
Here’s what happens, some businesses rely solely on investor funding to stay afloat.
But when that funding gets cut, they’re forced to downsize or, worse, shut down entirely.
No matter how much investment you secure or how much pressure you feel from investors, your focus should always be on your customers.
Build a business that’s profitable first.
4. The growth phase
In the growth stage, you need to plan your business growth strategy. There are 3 ways to approach it, and which one to prioritize first depends on the sector your business is in.
Growth efficiency
This is the stage where you prepare your business for growth.
- In the building phase, you work in the business, focusing on making it profitable and stable (startups often skip this part because of investments).
- You hire people who help you run the business.
In the growth stage, things are different. While solidifying what you have built, you also need to prepare your business for growth.
- You have to focus on working on the business, which means optimizing processes.
- Hiring and partnering with growth-oriented individuals and agencies.
It’s like transitioning from running a 5k to preparing for a marathon, you need to approach it differently. You might need more comfortable shoes, water, snacks, and a well-thought-out plan to run the distance.
Marketing Strategy
Scaling Strategy:
Focus on selling more of your current products to your existing customers.
- Example: Startups may scale by selling their existing product to a larger audience or more customers. This approach allows for growth without significant additional product development.
Building Brand Awareness:
The more people know about your brand, the more you sell. Increasing visibility is key during this stage.
- Example: A fashion business may prioritize building brand awareness to establish itself as a trend leader, ensuring its collections attract a wider audience.
Product Development
Create new products for your existing customers to encourage repeat purchases and loyalty.
- Example:
- A fashion business, which thrives on trends, might launch a new collection every season or year to keep customers engaged and excited.
- A software business, on the other hand, may not create entirely new products but instead focus on upgrading the existing ones. By making them more advanced, user-friendly, and overall better, they keep their customers satisfied and ahead of the competition.
Expansion strategy
Expand into new markets with your existing products to increase revenue streams.
- Example:
- For a restaurant business, increasing revenue doesn’t come from adding new menu items. Instead, it’s about expanding into new locations by opening additional restaurants. This approach allows the business to reach entirely new customer bases.
5. Scaling: Handling Larger Demand
Scaling your business means finding how to increase the revenue with existing customers.
The marketing strategy you need to use in this stage is different from branding, you need to:
No matter what your strategy should always lead to sales
- Lead magnet automation
- Use Urgency tactics
- Upselling or down selling to let your customers spend more
- Collaborating with sale-driven Influencers
- Serving more customers without dramatically increasing your costs.
You’ll need to improve your processes, automate where possible, and expand your team to handle the larger demand.
Efficiency and speed are key during this stage, your goal is to grow profitably by increasing output while keeping expenses in check.
6. Branding: Building a Strong Identity
While brand personality starts from the building phase, in this stage you’re building a brand.
Your business needs a strong identity that customers recognize and trust.
Focus on creating a brand that reflects your values, mission, and unique points. Branding is about more than a logo it’s how people perceive your business.
The marketing strategy you should focus on.
- Create Exclusivity: Offer limited editions or unique access to make customers feel special and valued.
- Building a Tribe: Foster a community of like-minded individuals who resonate with your brand’s mission.
- Premium Prices: Price your products or services to reflect quality and exclusivity, attracting committed buyers.
- Positioning Your Brand: Clearly define your brand’s identity and values to stand out in the market.
- Collaborating with Influencers: Partner with influencers to amplify your brand’s message and reach a larger audience.
Consistent value messaging, great customer service, and a distinct image are essential to building a lasting brand.
7. Expanding: Reaching New Markets
Finally, once you’ve scaled and built a brand, it’s time to expand.
Some of the expansion strategies may already happen in other business stages, especially in the growth phase, if that didn’t happen, this is the time to think about expanding your business
This could mean:
- Entering New Geographic Markets: Expand your reach by tapping into untapped regions or countries.
- Launching New Products or Services: Diversify your offerings to meet additional customer needs.
- Targeting a New Customer Segment: Identify and cater to a different audience to grow your market share.
Expansion allows you to take what you’ve learned from earlier stages and take your business to new heights.
In this stage, you are repeating the previous stages that you already went through so you have the experience to do it again but this time faster and more efficient.
Conclusion: The Continuous Process
Building a business is a continuous journey.
The key to success is starting small, growing strategically, and being adaptable as you navigate the challenges and opportunities along the way.
Whether you’re in the creation stage or ready to expand, following this model can help you to have directions and clarity to build a successful and sustainable business.
