Stage 3 is achieved when it is clear there is an established revenue and/or customer base. At this point the business is sustainable with a proven value proposition to customers, pricing and both sales and operations processes that work, albeit not necessarily very efficiently.

You may or may not be profitable, but there is a clear path to profitability with far fewer unknowns and big risks. There is still a lot to learn and many processes to optimize, and the management is usually still stretched too far executing, instead of managing.

The transition begins here to get management, operations and sales systems down to a science to be ready to scale the business with quick growth and drive profits before competitors can replicate your product or formula. Optimization to reduce costs and increase sales is the main focus so that you are ready to scale without high risks, poor controls and/or other unknowns.

The risk at this stage is often running out of time, or capital, before you can scale to support the overhead of the business. Often founders are being stretched beyond their experience here and need to be open to change management styles dramatically. This often means bringing in some outside expertise from "professional managers" or consultants to help shift management gears and move from a pure entrepreneurial style to a more "buttoned up" business management style with systems, procedures and controls that prevent the business from spinning out of control, yet preserve the founders values and vision.

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