The Four Key Stages Of The Entrepreneur Journey

The entrepreneur journey is notoriously rollercoaster-like. No two paths are the same. Every entrepreneur starts at a different place and time with a unique set of skills, advantages and world views. While journeys are different, phases share characteristics.

Knowing where you are in your journey can supercharge your progress. It provides clarity on where your focus should lie and what you should aim for in the short term.

The four key stages of the entrepreneur journey

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All entrepreneurs can be placed into one of the four stages: execute, systemize, scrutinize, exit. These stages make up the Ten Year Career framework. While the time frame for completing this journey doesn’t have to be ten years, it’s a useful duration within which to think long term yet not waste time.

Each stage requires specific focus and actions in order to progress to the next.

1. Execute

All entrepreneurs begin in the execute phase. It’s the phase where they are setting up, involved in every aspect of their business and working to prove their concept is viable. It’s exciting but it’s hard work.

The reality is that most entrepreneurs never progress beyond the execute phase. Even as part of a larger team, they remain instrumental to the delivery of some aspect of their business and crucial to internal processes.

An entrepreneur is in the execute stage if they are responsible for executing a primary function of their business. This may be in the delivery of services directly to clients as a freelancer or sole trader, or by providing a fundamental internal process within a larger team. Their business relies heavily on them and wouldn’t survive an absence of several weeks without a replacement. Their team may comprise hundreds of people, but if they are crucial to a fundamental process or the main bottleneck, they are likely in the execution phase.

The purpose of the execute phase is to establish the foundation of a successful business. Developing a product or refining a service and finding product market fit. The business should also discover the characteristics of the primary target audience as well as adjacent audiences. At first, there may not be sufficient resources to hire a team to execute the entire working of the business. In this stage, the owner greatly benefits from being on the ground themselves, engaging with customers and learning about the business processes first hand.

An entrepreneur may enjoy the execute phase or they may feel overworked. Doing everything in their business, they might feel stretched thinly, akin to spinning plates and hoping that one doesn’t drop. Although this first stage is the most exciting stage, it likely won’t feel like it at the time, it will feel like very hard work. Execute is where most business owners are, mainly because pushing through to systemize is a big task and, in the short term, the easy option is to remain in execute.

Despite its busy nature, the execute stage doesn’t need to be complicated. The entrepreneur is simply proving their product within its target audience and making sales happen. This has three elements: finding the right product or service, finding the right audience for that product or service and finding the right channel by which to reach that audience with that product or service.

Once they have completed this phase, it’s time to systemize.

2. Systemize

The systemize phase is the next along from execute and incorporates the entire transition from the entrepreneur working in the business to working on the business. This is enabled through the documentation of systems and processes that are automated or followed by trained and trusted individuals. Essentially, all execution is managed by other individuals or software.

By the end of the systemize phase, the business has processes that run by default and break occasionally, not the other way around. There’s a standard way of doing things. Although the entrepreneur may still have a role in the business, they are not crucial to the working of the business and delivery of products and services. They are not responsible for approving work or fielding questions from team members. At this stage, the entrepreneur might feel like their company is a well-oiled machine and when they make changes they’re tinkering and honing. Very few business owners complete this stage.

The transition between the first two stages, execute and systemize, can be intense and laborious, because the entrepreneur may still be doing everything in their business and a central part of its operations while working on making processes.

Systemized businesses appear to be well-run operations with a distinctly relaxed owner. The owner has progressed from the busy execute stage and has more time available, mainly because of the processes that are now a key part of operations. Franchises are examples of highly systemized businesses. Everything about the product or service delivery follows a structure which can be replicated in new locations. A systemized business makes use of automation software and has standard operating procedures (SOPs) for how to do everything in the business.

Systemizing allows for scale as well as increased strategic thinking, reflection and personal development, leading into the third phase of scrutinize.

The four key stages of the entrepreneur journey

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3. Scrutinize

Scrutinize is the third stage and the next along from systemize. Here’s where the entrepreneur’s well-oiled machine is running so well, it might even be growing without them. They have created a system that works, their team members are empowered to excel in their roles and the entrepreneur finds a lot of blank space and moments of calm because their business is running and growing without their involvement.

They have strong second-tier management in place, who may be vested in some way, to manage the team and carry out the business operations. These people take pride in resourcefulness and self-sufficiency but are aware of their limitations and know when to ask for help. An entrepreneur is in scrutinize when they have executed extensively, systemized meticulously, and found themselves with options. Scrutinize is where an entrepreneur answers the question, “what do I want to do now?”

Scrutinize is a checkpoint. Here’s where the entrepreneur can decide what they do next and make their plan. They might decide to start a big project within the same or new business and head back into the execute phase on a new level. They might sit back and relax, or travel the world while their company runs. Or they might think seriously about an exit, now their business is in such a great place. If an entrepreneur has the luxury of this decision, it’s likely they are in the scrutinize phase.

You will know a business is in this stage when you see a business owner who has a successful business but seemingly has nothing to do. Their team is self-sufficient, the day-to-day operations are all taken care of with no exceptions. Maybe they seem to always be travelling or doing hobbies and non-work things. They may be tinkering on peripheral projects within their business. They may have adopted the role of coach or chairperson to the business. Maybe they are formulating their exit plan.

4. Exit

The fourth and final stage is exit. Not every business reaches the exit phase. Once a business owner reaches scrutinize, they might decide they like it there. They enjoy having a business, they enjoy doing their own thing and dipping in occasionally. They’re quite happy to run a company that facilitates their lifestyle.

Exit is where the entrepreneur removes themselves from the business completely, most likely in one of two ways. One is that they sell. They find a buyer, negotiate their deal, hand over and leave. The other is that they remain the owner of their business but don’t do any part of the operation at all. They are truly out of the business, not to be drawn back in no matter what happens.

The exit stage is an advantageous position, which hardly any entrepreneurs reach. Here they either have a saleable entity that they are looking to sell or a business that they own and do not run that they are looking to step back completely from.

The systemize phase is key to reaching the exit phase because without systems or documentation, and processes that reliably run, a business is far less saleable. This means it might be sold for a lower value than it’s capable of or the owner might be required for an extended earnout period, where they are effectively hired by the buyer to oversee the business upon sale. If the entrepreneur wants an exit, it’s likely they don’t want an earnout, and they want to sell their business for the highest amount it can command.

Exit stages tend to be the shortest and the most secretive. During the exit phase, there are very few people who need to know what is planned, in case a sale falls through or the news has a negative effect on clients or team members. Exiting (either selling or stepping back completely) requires sustained effort to make happen and likely won’t be publicised at all until after the entrepreneur has made the exit and the succession plan is underway.

What to do from here

Entrepreneurs who aspire to exit, whether by selling their business or owning but not running it, should first identify which stage they’re in. This requires an understanding of each stage of the framework as well as awareness of their role within their business. This creates the plan of where to focus and what to do next.

Entrepreneurs who identify as being in any stage beyond execute must minimise activity representative of the previous phase. An entrepreneur in systemize works to minimise the amount of execution in their day-to-day. An entrepreneur in scrutinize must finalise all their systemizing.

Similarly, entrepreneurs shouldn’t skip ahead in their thinking. Systemize only when the execution phase is complete, scrutinize only when systemize is complete, look to exit only after sufficient scrutiny.

Not regressing or jumping ahead or regressing brings clarity, for the entrepreneur and their business. The goals of the stage and action required is clear. Team members are trained, trusted and not micromanaged, and the entrepreneur’s role evolves along with the business that is becoming equipped to thrive without their input.

Identifying the journey in terms of execute, systemize, scrutinize and exit also means that it’s clear who to ask for guidance. An entrepreneur’s support network should be people in the same stage, each working on progressing to the next. Their mentors and coaches, or those they ask for advice, should be those one or two stages ahead of them. Similarly with the books they read and the advice they take; there is right and wrong advice for each stage.

Following the framework means knowing what to follow and what to discard, setting you up for a prosperous life and career on your terms.