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What's Your Priority (In Two Words Or Less)?

What's Your Priority (In Two Words Or Less)?

Deconstructing the stages of business (and what it takes to get to the next)

Peter Giordano III
July 11, 2024

_{[Read time: 7 minutes - worth every word]}

I thought I had a market fit.

I didn’t.

I was generating and earning income, but that didn’t mean the market validated my idea entirely.

I was surviving.

In fact, I learned that it’s possible to survive in business without market fit. The caveat is that you need to do everything for anyone and work all the time.

I did that.

This is mistaking movement for progress.

The issue came down to a single word: priority.

I had been treating it like an overarching concept, not for its actual meaning. Priority represents one thing over another. It’s a ranking, not a grouping.

It.

Means.

One.

Thing.

Over.

Another.

Always.

(…just reminding myself)

Ok, rant over.

Here’s the crux of the matter: You don't have a priority if you try to prioritize more than one stage at a time.

Someone asked me a simple question:

What’s your priority (in two words or less)?

I babbled.

But the answer is within what stage your business is in.

There are 6 stages:

Start
(Market) Fit
Growth
Profit
Cash Flow
Exit

Let’s go through each stage and cover 3 things:

Characteristics (of the stage)
The impact on time and resources
How to get to the stage (i.e., priority)

Start Stage

This is the most obvious stage but also the hardest to leave.

Many companies believe they have moved on when, in reality, they are still puttering around.

Consider a marketing consulting duo that has spent five years pivoting their service and target customers. Five years might suggest something is working, but they haven’t yet validated a single idea.

You’re here if you:

Just beginning your business
Hopping around, trying a whole bunch of services
Been surviving from a diversified set of ‘meh’ offerings (not thriving)

From a resource perspective, moving an inch requires a lot of force. That means spending attention, energy, money, and effort.

To get to the next stage (market fit), your priority is to analyze.

Analyze what’s working and what’s not
Analyze what customers (or the market) are saying
Analyze how others in the space are figuring it out

You’ll often hear early on that it’s important to experiment. While it’s true, don’t just throw spaghetti at the wall to see what sticks — make calculated experiments instead.

Market Fit Stage

You’ll experience market fit when you see clear demand for your service.

I’m stressing the “your service” part because market fit means demand for what you’re selling, not just for the category of your service.

For example, let’s say you want to be a productivity expert specializing in Google Workspace tools. You may see another expert doing precisely this in the space (and are thriving). But just because another productivity specialist makes it work doesn’t mean your service earned market fit.

It’s because aspects of their business model are hidden from view, so you can’t rely on others to prove your market fit.

It’s a hard pill to swallow. But fortunately, that pill is full of vitamins and minerals.

In this stage, your strategy and unique value proposition develop (i.e., what makes you different…what, how, why, when, who).

From a resource perspective, you’ll see a steady flow of outputs for every input. That said, it’s still early here, so more inputs are required to generate any momentum.

Aside from tangible outputs, you will experience some reassurance from the voice in your head, “Woah, this is actually working.”

To get to the next stage (growth), your priority is to maximize.

Maximize attention and reach (i.e., advertise and market)
Maximize resource inputs (i.e., put them to work)
Maximize your farmer-like qualities (i.e., plant seeds to harvest later)

Getting market fit is a huge victory. You’d be surprised at how many think they have it but don’t.

Next is the growth stage, but I need you to realize something → here, the stages get…flexible…meaning the order of growth, profit, and cash flow can differ depending on industry, accounting methods, and business models.

I’ll explain in more detail below.

Growth Stage

This is all about generating revenue.

More specifically, we’re talking about scale.

One word: more.

More customers
More resources
More exposure
More time
More risk

More is freakin’ hard.

Because with every growth spurt, something breaks.

Cracks start to become canyons
Bottlenecks halt progress
Problems get exposed

For example, a single piece of content goes viral and floods an executive business coach (offering 1×1 services in the media industry) with 71 new prospects.

And while your blood pumps with every level of growth, you quickly realize the cliff is closer than you hoped for.

From a resource perspective, this is where your outputs “can” turn positive. I stress “can” because you can strategically invest more inputs if you have the financial backing.

For you to get to the next stage (profit), your priority is to optimize.

Optimize costs and cash
Optimize processes and systems
Optimize your attention and energy

Because at some point, you must take some off the table.

And by off the table, I mean profit (or cash flow). Otherwise, you keep feeding the beast, and it’s unsustainable.

Profit Stage

This is about transforming revenue to bottom-line impact.

Many of the actions that you need to take to grow revenue are not the same as those that you need to take to turn a profit.

There are only 5 ways to profit, but 3 matter most when going from a growth stage to a profit stage.

Cut costs and get strategic with cash
Shift attention and energy to higher profit activities
Increase price (without changing the fulfillment process)

The goal here is to squeeze more out of every dollar you deploy and earn. Resource-wise, by definition, means you’re getting more output for every input.

If you aren’t profitable (at some point), you don’t have a business. You have an expense hobby (and money pit).

The only way to keep playing this game forever is to build a sustainable revenue-to-profit engine.

But you can survive longer without profit if you turn revenue into cash flow instead.

To cash flow, your priority is to assetize.

That means investing capital into business assets or receiving cash before services are rendered.

Cash Flow Stage

This is where the nuances of accounting methods and business models matter.

You can have a business that earns $0 in profit but makes $1,000 in cash.

For example, a real estate analytics firm buys the building it operates in, which comes with two co-working spaces. It decides to rent them out. In theory, the firm could depreciate the building, causing a loss in profits but still an increase in cash from the rentals (since depreciation is a non-cash expense).

You can also have a business where cash flow and profit are the same.

For example, a content specialist offers a 6-month package with a discount for advance payment. If the business uses an accrual-based accounting method, it gets the cash, but it doesn’t count as profit until it delivers on the promise.

Both examples here are illustrative, nuanced, and technical (and to disclose, I’m not an accountant…I studied accounting to understand them, but I don’t offer that type of advice. If you want a reference for a great accountant, let me know, and I can match you).

The whole point of cash flow is to watch the bank account grow.

The last stage (exit) is unique, requiring a different lens and the ability to do one thing well: professionalize.

Professionalize your operations and financials
Professionalize your processes
Professionalize your value

You know all the quirks and kinks when you're running the show and can deal with them. But in a business looking to exit, these look like bruises.

The critical thing to remember is you’re no longer marketing only to customers but also positioning yourself to investors.

Exit Stage

When you do all 5:

Analyze
Maximize
Optimize
Assetize
Professionalize

You can the most important “ize” there is → capitalize.

When you operate a business, you earn annual dividends (i.e., income). But it also comes with yearly inputs.

In the exit phase, you get a lump sum for all your work once you sign on the dotted line (it’s a bit of hyperbole, but seriously, it could be a big chunk of change).

Every business can sell, but not every business is sellable.

The most important thing is that the business doesn’t rely solely on you. Because if the asset is you, what else is there to buy?

Back to Priority

It’s important to be clear with yourself which stage your business is in.

When you understand the stage, your priority, focus, decisions, and actions are clear. You make real progress.

Let me end with a caveat → use this framework as a framework, not as law. The order may be different; you may visualize it more like a cycle (not a step function) or skip a step.