Do You Know How to Take the Guesswork Out of Growing
Your Business From Start-Up Through Ramp Up?
The honeymoon is over. You have your startup capital,
you ramped up to 4 – 6 employees pretty quickly and now the fun begins.
Getting out of the gate with a new company isn’t easy but it’s a cake walk
compared to creating a consistently profitable business that you can run and not have it run you.
The reality is that business owners continue to struggle trying to keep
their focus on the constant barrage of issues they have to deal with
in a fast-growing enterprise.
Their companies have quickly grown beyond the owners’ ability to manage everything.
That happens, by the way, as soon as you start adding full-time employee to the mix.
In a six-year research study of entrepreneurial companies, the trigger to growth trauma wasn’t brought on by an increase in revenue/sales or profits. It was brought on by an increase in the number of people in a company.
Intuitively, business owners know when growth trauma is occurring. A business owner can recognize the signs of growth impact early on in his/her company’s life cycle as they experience a dip in profits, customer satisfaction decline, and employee morale issues surface.
The Complexity Factor
The 7 Stages of Growth enterprise development model helps business owners get ahead of growth issues, actually allows them to predict growth impact and helps them understand what they have to do to manage their company as they add more people.
The complexity of any organization is increased because of the number of people, not the amount of revenue, you have.
Money and processes are easy to manage compared to the dynamic impact that people bring to the table.
A Stage 1 company, (there are 7 Stages that cover companies up to 500 employees) or Start Up, has 1 – 10 employees.
A Stage 1 company is CEO centric – meaning the CEO is likely the ‘specialist’ who has created a product or service and is now getting her idea to take shape. Therefore, 50% of your time should be spent as the technician or the specialist while only 10% of your time will be spent as a manager.
As a company grows, so must the leader. Each stage of growth will require something different from the leader. Understanding what is required of you as your company evolves can either propel the company forward or cause the company to become ‘stuck’ – profits never materialize; sales suffer; there is high employee turnover.
The Five Non-Negotiable Leadership Rules for a Stage 1 company:
- You must generate, track and preserve cash
- You must focus 80% of your resources on selling the 2 – 3 offerings with the best margins
- You must hire for ‘how the person fits in with the team’ first and second, for how competent they are
- Waste no time trying to ‘stabilize’ your company – embrace chaos – command the team and inspire the employees
- Establish regular one-on-one meetings with each employee designed to build a company-wide performance mindset, feedback loop, and employee development
Survival is the name of the game in a Stage 1 company. As you grow closer to Stage 2 (10 – 19 employees) it shifts to being about growth. Stage 2 is about supporting higher sales levels and making a profit.
The bottom line in understanding the 7 Stages of Growth that all companies
go through is that the complexity of an organization will always extract its due.
Now, Get a Free Growth Stage Phone Strategy Session With Me.
Then, we will schedule our call.