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Systems I Leadership I Operations

The Five Stages of Leadership Every Business Owner Can Go Through

Every leader starts somewhere. But if you want to move forward and be a better leader, there are a few things you should know.

I want you to picture the most beautiful walk-in closet. There's an island in the middle. And there are beautiful bins with everything lined up and perfectly labeled. 

Now, do you think that such an organized walk-in closet was built just like that? 

Not really, right? 

To reach such perfection, the owners must have put in a ton of work. They probably bought a ton of storage to make sure everything is arranged in order. And they might even have hired someone to design it for them. 

But if there’s one thing they didn’t do, that would be to buy more and more clothes while organizing their closet, right? 

Japanese organizing consultant Marie Kondo teaches us that the first step in cleaning up… would be to decide what to keep. In other words, we need to clean and get lean before getting on to something new.

You might be wondering: “Why are you talking about cleaning up closets?” 

Well, this all relates to the topic of today’s article, which is all about the five stages of leadership that all business owners go through. 

You see, to be a good leader, we must first learn how to evaluate what’s going on in the business. We can’t just chase the shiny new object before completing a new task. And we can’t just hire somebody new before finding out if we actually need more people.

Now, if you’re planning to replace somebody who's not doing a good job… the thing is that typically, poor performance isn’t the team’s fault. It happens because of a lack of leadership.

It’s the same way that if a flower isn't blooming, it's not the flower's fault. It's the environment. There’s not enough sun, too much sun, not enough water, or too much water.

So, how do we start becoming better leaders? Read on to find out.

 

The 5 Stages

 

Stage 1: Pioneer

Every business owner starts at this stage. If you’re a pioneer, there’s nothing to be ashamed of. You’re most likely doing this solo. That is, you’re venturing into the world of business with a new idea.  

Everything is exciting at this point. You’d be experiencing new things… but you’re probably quite not making money yet. Or if you are, it ebbs and flows. Some months would be great… while others won’t be as much. You’d probably be hitting revenues under $100K annually.

At the pioneer stage, you must be patient. Don’t be too hard on yourself but learn as much as you can… especially from the mistakes you’d be making along the way. 

 

Stage 2: Powerplayer

When you become a powerplayer, that means you’ve started to find your way in the industry. You’ll find your business actually gaining some traction. 

At this stage in your leadership journey, you’re sure that you’ve got something good going on here. Your products are more solidified. Plus, you already know your ideal client and you’ve started reaching out to them.

You’ve also gotten past $100K annual gross revenues, which is a huge accomplishment given how hard it is to make it happen.

Although you’ve gained so much clarity, you’re possibly still a solopreneur, or you’ve got 1-2 people helping you. You’re making money but probably still not paying yourself… or you’re very underpaid for the amount of work you’ve been putting into your business.

 

Stage 3: Pathfinder

As a pathfinder, you’re finally in the game… And it feels like you’re winning! You’re adding people to your team because you’ve realized you don’t want to do this alone. And you can’t really do this alone. 

You’re learning how to delegate, but it’s still a work in progress. 

Your priorities shift from survival to growth. You’re not only after financial wealth but time wealth as well. 

What’s more, you’re now focusing more on profit margins than just gross revenues. But you may still be underpaying yourself… and you can still see room for improvement in many areas of the business. 

Your profit margins would probably be in the range of high multiple six figures/year… possibly even right at that 7-figure mark.

 

Stage 4: Powerhouse

As a powerhouse, you want it all. You’re now someone whom a lot of pioneers have been aspiring to be. Having more money while working less is now a huge possibility for you.

If the pathfinder is someone who’s looking for growth, as a powerhouse, you’re now on the lookout for better delegation. This means that you’re heavily focused on transferring the responsibility over to your team so you can truly step out of the day-to-day operations. 

At this stage, it’s possible for you to focus on the things you love and let everyone else do the rest. You can venture into a new business, go on extended vacations… or be with your family and friends.

Your profit margin is healthy, and you’re paying yourself a solid consistent paycheck that feels great. Annual gross revenues are somewhere between $1-$9 million.

 

Stage 5: Powerhouse+

This is the pinnacle of business leadership. 

If you have successfully become a Powerhouse+, time freedom and healthy profit margins are your norms. But you soon realize that what worked to get you to $2 million won’t quite do the same to get you over the $10 million mark.

You’ve been breaking the business piece by piece… in order to make it scalable and more sustainable. 

Trusted leaders are now in place and run the business smoothly without your help. The company is no longer reliant on just you to come up with new ideas, which means even more time to step into your zone of genius… Or you could retire in full glory. 

You can do whatever you desire because you have enough money and freedom to do as you please.

 

Start Your Journey to Becoming a Powerhouse

Now that you know the five stages of leadership that every business owner can go through, you can assess at which stage you currently belong. Don’t be discouraged if you’re reading this as a pioneer… because as mentioned earlier, everyone starts as a pioneer.

All you’ve got to do is to get your head in the game. 

You definitely have the potential to become a pathfinder and even a Powerhouse+ someday. But you need to equip yourself with enough knowledge, devote enough time, and commit to taking the right step forward to reach your goals.

Now, if you’re ready to learn how to move past each stage of leadership, you may schedule a free strategy session with us. Book a call here: www.stacytuschl.com/call.