4 Stages
Happy Sunday!
I spent this weekend in San Diego with my wife on a babymoon. We’re expecting our second child in May, and the time away was great. We stayed at Hotel Del on Coronado … honest opinion: a great location, but a bit too commercial for my liking.
In this week’s edition, I will share a few insights about the stages of service businesses from Breaking Through, including Bullpen’s current growth stage.
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This week at Bullpen …
We reconnected with a mentor to help with a few new challenges we’re starting to experience as our business grows. This mentor took a staffing business from inception to IPO, and we always receive invaluable input from him.
We identified a customer success need (or opportunity?) in our business. More to come on this.
I’m contemplating if we should separate the business development and account management roles in our business. In order to scale, we need business development (aka hunting) to be deeply engrained in our culture.
4 Stages of a Service Business
As teased above, I stumbled upon a framework that helps describe the different growth stages of a service business. In short, there are four stages:
Owner/Operator Dependent
Independent Operation
Organic Scale
Strategic Expansion
In the Owner/Operator Dependent stage, the founder is a lynchpin in key business operations, most often these include sales and fulfillment. Founders who prefer to keep their business in this stage often consider it a lifestyle business. With the majority of businesses having one or two people, lots of commercial real estate investment firms and staffing companies are lifestyle businesses.
Bullpen is currently in the Independent Operation growth stage. In this stage, major functions (in our case sales and talent management) are owned by non-founder team members. Typically, the business has a core team of 4-5 people who have a close relationship with the founder and keep the wheels on the bus.
The Organic Growth stage is where Bullpen is actively growing towards. In this stage, the core team from the independent operation is replicated several times. Leadership transitions from managing independent contributors to managing team leaders/managers.
The Strategic Expansion phase describes businesses that are launching additional business lines or making acquisitions of other firms to strategically grow. One mistake that founders make is expanding into additional business lines before their core business is successful in the organic growth phase. This creates divided attention that can make the core business stall.
A quote from this week that has me thinking … “Does the amount of focus that I’m giving this match its importance?” - James Clear
That’s all for this week!
✌️📤
Tyler
Founder @ Bullpen