Every entrepreneur goes through some version of these stages and gets stuck in one or a few. This guide shows us where we need to put in the work first!

The E-Volution Flywheel is The Profit Recipe’s concise, visual way of describing the journey we’ve seen many, many entrepreneurs take and the path we’ve trod as business owners ourselves. 

It combines two concepts: 

1. E-Volution is the ‘entrepreneurial evolution’ every business owner goes through—from startup to thriving business or sale—while figuring out how to be a leader, owner, and fulfilled person.

2. The flywheel is a reference to Jim Collins’ “Flywheel effect.” Once we evolve through and master each stage, the flywheel gains momentum and starts spinning faster and faster. And achieving our goals becomes easier and easier.

There are five stages: Startup by Design, Leader by Design, Team by Design, Business by Design, and Life by Design. 

So, what are these stages, exactly, and how do we master them to get the flywheel spinning?

To achieve the positive, first examine the negative

Most owners and their businesses hit a barrier in one or several stages at different points. So, before we describe each one and its implications, understand that we must master (or at least get pretty good at) the essentials of every stage to succeed. And while they may seem perfectly sequential, remember: This is entrepreneurship; it’s messy. 

So, except for the very beginning of the startup phase, we’re all going through, struggling with, and mastering different parts of the flywheel at the same time. The key to moving forward is identifying which stage or stages you’re really stuck on, followed by tackling the earliest one first.

Here are a few questions that will help you figure out where you’re stuck:

1. If you inventory your time, where are you spending most of it now?

2. Where do you feel you’re stuck? What aspect of your business represents hitting that invisible barrier that prevents you from moving forward? These are things you regret, resent, or otherwise feel are not working.

3. Where do you want to spend most of your time?

Keep the answers to these questions handy as we go through the stages. Then, when that ‘ah-ha!’ moment hits, you’ll know where something needs work.

You can also use this Life by Design Assessment to see where you’re at in the E-Volution Flywheel. It includes a Next Steps Report that provides actionable guidance on getting unstuck to E-Volve further!

E-Volution Stage: Startup by Design

This stage is all about struggle, survival, finding stability, and a bit of pride. As startup founders, we constantly feel we have to prove our business and, ultimately, ourselves. 

We’re experimenting with pricing, products and services, and market fit—who is our core customer, and how do they value us? We’re attempting different sales and marketing strategies, maybe hiring our first people, and otherwise figuring out the basics of a business that can survive and grow. But usually, we’re not sure how to scale or, in many cases, even achieve profit. 

To get unstuck from this stage, there are three essential steps:

1. Understanding our market fit by identifying the customers who value us for who we are and how we do things.

2. Figuring out — quickly, if possible — whether the business is scalable. This usually comes down to whether it’s entirely dependent on you or responsibilities can be distributed. Also crucial is whether enough of the market wants the products and services to drive real growth. 

3. Solving the profitability equation: We have to figure out how to (at least) achieve break-even or minimal profit. This formula can eventually improve through scaling, better processes, and other operational and marketing improvements.

Startup by Design is all about mastering the basics and proving a business’s viability. And once essential stability is achieved, it opens up new aspects of E-Volution.

E-Volution Stage: Leader by Design

Again, these stages aren’t perfectly sequential. But getting stuck in the Leader by Design phase usually happens after the initial startup struggles. That’s because it involves either an entrepreneur’s sudden epiphany or a slow, uncomfortable realization about ourselves. As we start breaking out of the brand-new phase, we realize that we aren’t enough—a founder simply can’t do everything.

This problem straddles at least two stages of the E-Volution Flywheel—Leader by Design and Team by Design—but improving our leadership is the first step in addressing it. 

At this point, it feels like you are doing everything. Everyone is coming to you for every answer, and you have no time left to do what’s needed to get the business moving. You’re treading water and keeping your head above it, but not swimming.

Sound familiar? If so, the three aspects of getting unstuck are:

1. Self-awareness: What are your strengths and weaknesses? What are the things you should be focusing on vs. what you focus on now? A great example of an entrepreneur being stuck in this stage is someone managing the operations or financials even though they’re terrible at those things and don’t enjoy them. Identifying where these weaknesses and dislikes exist is crucial to solving the problem. 

2. Embracing vulnerability: Once leaders figure out what they should and shouldn’t be doing, they have to be vulnerable enough to admit it … and ask for help!

3. Delegating and elevating: The last two psychological leaps lead to the actionable solution. It’s time to start delegating to and elevating the people around us. This is all about empowering our team to take ownership of crucial parts of the business so they can do the things we can’t do well. 

Here’s how The Profit Recipe can help you master the Leader by Design stage. And an E-Volved leader takes things further in the next phase!

E-Volution Stage: Team by Design

So … we’ve experienced the existential startup struggles. We’ve worn every hat possible and done every job, from keeping the books and closing sales to taking out the trash—followed by realizing we need help. Achieving this self-awareness and vulnerability propels us to ask for assistance and start building a solid support system—a skilled team that makes the business go.

There are actually two different parts to doing this, and two separate teams to find, recruit, and nurture:

1. The External Team

Running a startup can be lonely. Founders face challenges solo, and many become resentful, stressed, or depressed without any help. But none of us are alone in this struggle, and many others have faced and solved the same problems we experience. 

Thus, an essential step in getting unstuck from the Team by Design stage (and all those crushing feelings) is finding an external team. These people are a group of peers, mentors, and coaches who have been there, done that, and are willing to share their stories. Whether through mastermind groups, The Entrepreneurs’ Organization (EO), the local chamber of commerce, or something else, we must find the folks who understand what we’re going through and are willing to help.

Mentors, often found among peers, have gone through your struggles and are willing and able to share actionable advice. Coaches can take many forms and may be paid or not, but these are the helpers who hold us accountable and have answers—or ask the right questions—to help us move forward.

2. The Internal Team

An external group of peers, mentors, and coaches provides essential guidance and confidence as business owners. But a great internal team makes the business go. 

Entrepreneurs likely already have a team by this stage, but it often isn’t a Team by Design. Now, it’s time to get intentional and specific about roles, responsibilities, structure, and accountabilities.

There are three vital elements to Team by Design:

1. Find the Integrator: This individual has that invaluable blend of organization and determination to get things done, turning a Visionary’s Big Ideas into reality. The largest error most business owners make is thinking they must control and implement everything. In fact, an Integrator is needed to implement great ideas consistently.

2. Build a Leadership Team: An Integrator isn’t enough once a business hits even modest size. That’s why we need a leadership team made up of individuals who ‘own’ different parts of the company—like sales, marketing, operations, and support.

3. The Right Structure is what makes it all work: it’s who does what and is accountable for it. 

As entrepreneurs, we sometimes hoard power and hold onto every decision across every aspect of the business. But a properly structured leadership team and dedicated Integrator allow us to let go and share the burden, unleashing exponential productivity.

Need help putting the pieces in place to achieve Team by Design? Here’s how The Profit Recipe can help!

Once the team is firing on all cylinders, it’s time to systematize and clarify the business to truly achieve momentum.

E-Volution Stage: Business by Design

This is the E-Volution Flywheel stage where things really start clicking, aided by beating the startup struggles, a leadership epiphany, and gathering a good team. But even after all or some of those pieces are in place, many entrepreneurs still feel overwhelmed. They still can’t see how the business works without them shouldering the day-to-day responsibilities or issuing daily orders.

This is why previous stages work in concert with Business by Design, which finally brings the order and discipline of a business operating system into the mix. 

Many entrepreneurs assume they’ve hit this point after reading some books, maybe attending seminars, and implementing bits and pieces of operating systems in a Frankenstein model. But the reality is that a business operating system only works well when we choose one and implement it comprehensively and consistently. 

Whether that’s E-Myth, Scaling Up, The Entrepreneurial Operating System, or something else—we must pick a system that works best for our culture and organization and stick to it!

Business operating systems do many things, but their most significant overall benefits are achieving a Shared Vision and Rhythm of Accountability, also known as the Accountability Pulse.

• The Shared Vision ensures everyone is pulling in the same direction. Every team member knows where we are going, is aligned around these goals, and understands their part in hitting them.

• The Accountability Pulse represents a rhythm of meetings and accountability that enables consistent, clear progress. We develop the key metrics, well-structured meetings, and priorities that move everyone closer and closer to the vision. 

Systematizing and clarifying the business, our vision, and how we get there enable growth and efficiency. And the latter benefit allows entrepreneurs to take advantage of the next stage.

Learn more about the Profit Recipe’s Business by Design services if you’re stuck here!

E-Volution Stage: Life by Design

Here’s where things get wonderful: living the life you want and only doing the things that you are good at and align with your purpose.

The stages of the E-Volution Flywheel may not happen perfectly in order, but the other ones enable Life by Design. Once entrepreneurs have a quality team in place and have established efficiency, accountability, and shared vision through a business operating system, we can let go. We are no longer working IN the business, rather working ON it. Our time and focus free up. And this liberty allows us to figure out how to live our best lives. 

Nevertheless, many entrepreneurs who don’t have all the other stages conquered still benefit from the first crucial aspect of Life by Design: uncovering our purpose. 

It’s always been there, lurking in the background since you were young—a pattern of meaning that you’ve experienced and expressed all your life. Our purpose is what gets us out of bed in the morning, ignites our passion, and makes us tick. Once we clearly define it, this ‘Why’ serves as a filter for how we work in our current business and what we choose to do in the future. When activities align with purpose, life becomes fulfilling.

This element also ties to figuring out our “ideal life,” a moving target that changes as we get older and E-Volve as people and business owners. For some, that ideal might be starting a second or third business; for others, it may be working three days a week and spending the rest of their time raising a family. In any case, we should think about, define, and go after our ideal life.

Finally, Life by Design involves embracing our Ikigai, a Japanese concept that expands on purpose. It relies on understanding our ‘Why’ plus doing what we love to do, are great at, people will pay us for, and is impactful on the world. This four-part formula leads to even greater satisfaction, engagement, and fulfillment—and may even help us live longer!

The Profit Recipe can help you clarify your purpose, achieve more freedom, and create a legacy. Learn more about our Life by Design assistance and how helping entrepreneurs fulfills our purpose.

The E-Volution Flywheel is an entrepreneurial roadmap. Where are you on your journey?

Every entrepreneurial journey is different, and so is every entrepreneur. But we all hit some form of these E-Volution Flywheel stages as we figure out how to lead, build a team and business, and live our best lives. And we all face challenges and get stuck sometimes, too. 

Look back at the questions from earlier in the blog and ask yourself: “What stage am I in?”

1. If you inventory your time, where are you spending most of it now?

2. Where do you feel you’re stuck? What aspect of your business represents hitting that invisible barrier that prevents you from moving forward? These are things you regret, resent, or otherwise feel are not working.

3. Where do you want to spend most of your time?

Again, the answers can reveal challenges in more than one E-Volution stage. But we should look to the earliest stage in the sequence where there are issues and solve them to move forward. The Profit Recipe exists to help entrepreneurs do just that.

Fill out our Life by Design Assessment to see where you’re at in the E-Volution Flywheel. It includes a Next Steps Report that provides the first, actionable steps to get unstuck and E-Volve further!

If all this seems daunting, remember this: the first time we go through the E-Volution Flywheel, it feels incredibly difficult. But as we master each stage, the flywheel starts spinning, the momentum builds, and everything gets easier and easier. 

Just as we’ve seen many entrepreneurs struggle, we’ve also seen many conquer their challenges to live Life by Design—doing what they love with the people they love, and making a positive impact along the way!

Empower your Leadership Team and improve efficiency, increase value, and foster collaboration to get better results. A professional Facilitator can ensure that all of your members are on the same page, so you can kick your business up a notch. Connect with The Profit Recipe to Achieve Traction.