Normal problems are those you can expect wit deal with during each stage of growth. Abnormal problems are problems that continuously reappear in a new form and can trap your business in a particular stage of growth. Pathological problems are chronic problems that have dire consequences that threaten the survival of an organization. Each of the ten stages of the life cycle of a business requires a fundamental shift in focus in five areas; goals, management style & structure, growth or decline of revenues & profits, types of problems, and type of rewards.

In the first stage, birth, you have to have enough certainty to take on the significant personal risk of starting the business. Most people at this stage work to meet their own needs but to succeed you will need to think of the needs of the business as different from your own needs.

In the second stage, newborn/infant ("You, Inc"), your business has now entered a race for survival by hiring help with the workload but with no organized team and you are really running the business. Your only goal is to survive and grow. Normal problems would include not knowing the difference between revenue and profits, low cash flow & production, and no systems or accounting. Very few rewards can be offered at this stage because the owner works for free.

At the third stage, toddler ("management by crisis"), your business starts to 'walk & talk' on its own. You have begun to build your management team but you still maintain absolute control over all core decisions. Your goals are to survive, grow, and begin to build a company. Cash flow is still a concern because revenues are used as if they were profits. Normal problems include lack of cash flow, no systems. lack of accounting and others can make poor decisions and create problems. Rewards would be pride, excitement for being a part of something.

At the fourth stage, teenagers ('crisis by management'), you start to develop a professional team to manage the business but it is organized around people vs tasks. Your goals are focused on growth in revenues, sales, entrepreneurship, creativity, and product innovation. The core authority is still the owner who structures the decisions. While cash flow grows, the profits are unknown and often nonexistent. Normal problems include lack of systems, unknown risks, dangerous overconfidence, lack of accountability, and the inability to distinguish the timing of good vs bad opportunities. Rewards can now include forms of commission and bonuses.

At the fifth stage, young adult ("the re-birth"), you are beginning to anticipate the future and make more educated, committed, and selective choices. You start to focus on the systems that allow you to settle down and get serious. Your goal would include increasing profits versus revenue and cut waste. Your management team is made up of professional and experienced managers who make the decisions while running some things through the founder. You build to a better cash position. Normal problems include deciding what not to do, internal conflicts, and psychological difficulties. Rewards can now include corporate and individual benefits.

At the sixth stage, the zone of maximization and maturity ("the prime"), you begin reaping the rewards and certainty. You have developed a system that consistently meeting the needs of the community, the team, and yourself. The goal at this stage is to increase revenue and profits and bring a vision to the world at the highest level. Normal problems include unpredictable outcomes, lower intensity, mismanaged costs, bureaucratic issues, and distracting opportunities. Rewards are related specifically to the behavior needed.

At the seventh stage, mid-life evaluation ("the transition"), things begin to deteriorate and fall apart. You must decide to innovate, allow your business to die, or execute an exit strategy. Your goal is to increase creativity and meet customer's needs in new ways. Your professional team is in need of some new blood and inspiration. Sales, revenues, and profits start to drop. Normal problems include people being taken for granted, low commitment, original team leaving, and blame versus resolving. Rewards tend to shrink or focus on maintaining the status quo.

At the eight-stage, aging ("the break down"), the breakdown begins to accelerate while the key leaders are in denial about the size of the problem. The goal is focused on survival and shifting blame. An aged management team refuses to transform while both revenue and sales drop rapidly. Normal problems include breakdowns in all systems and processes among people, customers, and culture. Rewards are simply delaying the pain.

At the ninth stage, institutionalization, the organization should be dead but it kept alive on life support through subsidization or nationalization. There is little purpose left and no sense of control. The goal is to keep it alive a few more weeks, months, or years. Management is living on what was. revenue and sales continue to drop rapidly. Normal problems include every type of problem particularly loss of customers, key accounts, key people, and processes. The only reward would be bankruptcy.

Finally, at the tenth stage, death, is no longer sustainable and with no people to support it, your business unravels and dies.

Similar to the stages of life, it is important to manage expectations according to the stage you are in. For example, would you expect a newborn baby to help you pay rent? So why expect your start-up business to support you immediately. It is normal for a teenager to act unpredictably, so too would a young business. If you can manage your expectations, you can learn which problems should be solved first and which can be put off.

The first time my wife understood why my startup business was taking up so much of my time was when I explained how a business is just like a child. In the beginning, it is helpless and completely dependent on me but one day it will be able to take care of us.