Why talk about levels of business?
The 5 Levels of Business we will talk about today, are those assigned using the framework we’ve developed to help our clients over at Helpful Business Performance. This assessment Framework forms the basis of our training catalog here at The Helpful Academy. Our training is about being strategic to achieve maximum efficiency & profitability. For most businesses, this means growing or leveling-up.
To know how to level-up, we need to know the business levels and what level the business is.
What are the 5 levels of business?
We have modeled our business levels off the first five levels from Roger Hamilton’s Wealth Spectrum Levels. Our framework breaks each part of a business down into key functions and uses criteria to rank the functions according to their level. The colour coding makes it very easy for our clients and students to see at a glance how their business is doing in each part of their business.
What do we measure?
Our Framework is designed around the 8 business fundamentals. Each of the 8 fundamentals is broken down further into key functions.
For example; the Business Owner fundamental is broken down into the 3 key functions
- The Business Owner’s time management
- Their health status
- Their commitment to the business
We recognise and assess at least 30 essential functions, depending on the business type and size.
How do we measure the levels of business?
We apply criteria on our framework to the key functions to determine what level they are performing. They will be performing at one of 5 levels.
At Infrared level, a key function is missing. For example, a business may not have any bookkeeping system or understanding of what financial obligations they have. Or, businesses in their infancy may be not separating out their personal and business finances.
At Red level, a key function exists but is insufficient for a business of their size. For example, a business might be using very accurate manual systems that are unreasonably time-consuming to maintain.
At Orange level, the key function exists but is applied inconsistently. Examples of this are that sometimes a business will file their tax returns and sometimes they won’t. Or, more often, they might have an excellent customer relationship management (CRM) system that used inconsistently.
At Yellow level, the key function exists and is operating very well, but is missing a key component. Or, can be applied more strategically to achieve the business goals. For example, if we consider the Business Goals/Plan, there might be a well-written plan being executed, but no formal review process or accountability in place.
At Green level, the key function is performing at optimal level. Systems and procedures have been made strategically according to the goals. Progress is measured. Refinements are regularly made.
It is unusual that a business would be able to achieve green level in ALL areas of the business, at all times, because life is imperfect. It can also be incredibly overwhelming to step back and concentrate on the entire big picture for long.
- The goal of the level-up process is to step back initially to design a map to achieve the business goals and set regular progress reviews
- Being strategic about the plan/map
- Getting back to doing business, aiming for continual improvement
How to level-up
Strategic leveling up is achieved by implementing SMART systems and processes. SMART systems are
Read more about SMART systems here.
Important notes about the levels
- It is harder for some key functions to achieve green than others
- In some cases moving between levels can be accomplished by some incredibly simple changes. Other times, moving between levels can require a significant change. For this reason, don’t get caught up in what colour you are.
Focus instead on aiming for continual improvement towards your goal.
We hope you have enjoyed our Business Fundamentals series! We will be continuing to talk about systems and processes over the coming months.