Ten levels of entrepreneur development

I wondered what is the difference between a coffee shop owner, a programmer building a startup, and an entrepreneur who has successfully sold his business to a strategic investor? Based on the analysis of successful and unprofitable projects, I formulated 10 levels of development of entrepreneurs, through which each of them sequentially passes.

Level 1 “dreamer”

I have a business idea, but no sales.

These are people who work for hire. A startup that develops a product but does not yet have sales to customers. A furniture maker who makes furniture for his home or as a gift for friends

Level 2 “self-employed”

I work with clients personally.

These are freelancers, self-employed, psychologists, coaches. A mini-coffee shop where an entrepreneur does everything: from purchasing to brewing coffee. A furniture master who started taking commercial orders and makes them himself.

Level 3 “master”

I have 1-2 managers or assistants, but the key clients are on me.

These are freelancers who hire assistants. Small Internet studios where the key clients are the director. A cafe that hired one or two baristas. A furniture master who hired assistants for his production.

Level 4 “manager”

Only managers deal with clients; I personally supervise them, personally performing the role of head of the sales department.

The studio director no longer works on projects, but only supervises employees. The cafe has hired all the line staff, and the entrepreneur checks their work. The furniture master does not perform any production operations, he only monitors the process and employees.

Level 5 “delegating control”

there is a department head, but I interfere in his work.

The studio has a head of sales or a technical director. The cafe has a chef who is responsible for all processes in the kitchen and supervises the employees. A furniture maker has a production manager who supervises the workers. At this level, the entrepreneur begins to manage the process through his first TOP manager.

Level 6 “I am a manager”

The company has 2 or more managers, I control all processes in the company and am responsible for profits.

Furniture business with production and sales department. The cafe has a chef and a senior administrator. The entrepreneur already manages a team of managers, fully performing the role of a manager.

Level 7 “owner of 1 business”

There is a hired executive director responsible for profit, but I still have functions in the company.

In a business there is a manager to whom the entrepreneur gradually hands over the reins of management. Now all managers report not to the entrepreneur, but to the manager.

Level 8 “managing a group of companies”

I have several businesses with managers who need to be monitored.

The business has turned into a branch network of cafes or furniture stores, each branch has its own director. Or the business turned into a group of companies when a complementary company was created with its own leader. The entrepreneur controls a network of companies and personally works with managers.

Level 9 “network owner”

I handed over control to the head of the group of companies, who confidently implements plans and reports on the budget; I only agree on the allocation of investments for the development of business areas.

A professional network manager has been hired to manage the team of managers and top managers and fulfill financial plans. An entrepreneur invests in development projects. Examples: Fyodor Ovchinnikov and DoDo Pizza, Sergey Galitsky before the sale of Magnit.

Level 10 “capitalist”

I choose where to invest – in my own businesses, in new projects or in other financial instruments, based on long-term strategy and ROI indicators.

The created business becomes one of the investment instruments of the entrepreneur-investor. At these stages, the company often becomes a joint stock company and goes public. Examples: Oleg Tinkov, Arkady Volozh (Yandex).

Entrepreneurs can be at different levels in their companies. For example, an 8th level entrepreneur, when opening a new business, may first be at level 2 – “I work with clients personally” and, developing the business, quickly rise to the 8th level he has already mastered. And if such an entrepreneur is just thinking about a new business project, then he is at level 1 “I have a business idea, but there are no sales.”

The transition to each new level is a kind of crisis, as well as a challenge for the entrepreneur, transformation of the business structure, changes in the motivation system and change of people.