I was talking with an entrepreneur the other week (let’s call him Frank). Frank has been in business for 10 years and, by all appearances, is running a very successful business.
His company has revenues in the $6 million range, and the business is quite profitable.
Frank called me asking for my help.
He started his business in 2008 during the depths of the recession. Over the course of the next five years, his business grew at a very rapid rate. Starting around the 2013 time period, his revenues peaked, and they have been stagnant for the last five years.
As somewhat of an aside, I asked Frank’s permission before writing this blog post. He read this before it was published.
Frank called me asking for help with marketing. He wanted me to provide guidance on how to scale his business and was hoping that I could provide some insight into some of the things he needed to do in order to improve his business’s inbound marketing.
The business’s phones didn’t ring with inbound calls, and leads weren’t coming in from the web. All business that was coming in was from outbound marketing initiatives and from referrals.
On initial glance, it seemed that Frank had an issue with marketing.
Or so he thought.
After a more in-depth conversation, it appeared that Frank’s problem wasn’t necessarily marketing. Yes, that was one of Frank’s issues, but the bigger problem was Frank’s inability to expand his business beyond Frank.
Frank has his fingers in everything his company does.
No major decisions —or minor ones for that matter—are made without Frank’s blessing. Frank had become an impairment to his own company’s success.
At first, the business grew because of Frank. Now, the business is stagnant in spite of Frank. The business is now as large as the business will ever get, and it likely won’t get any larger unless Frank makes some major changes to how he manages himself and his staff.
Frank is now working more hours per week and barely keeping up. He mentioned that his staff is competent but not motivated. They weren’t taking courses and learning, at least not at the rate required for his company to compete and keep up with industry standards.
Although many variables are required to build and scale a business, one of the most important is the ability to scale a team of highly motivated and educated individuals who understand what’s expected of them.
Frank should take comfort in the fact that he’s not alone in this dilemma. Entrepreneurs are, by their very nature, Type A personalities that like to take control. It’s that very personality that allows the business to scale quickly, BUT once the business reaches a plateau, and future growth is now less dependent on any one person, it becomes more difficult to continue to scale the business.
The owner needs to let go. The owner needs to trust his/her own people and move aside.
Growth Tip 1: How Do You Scale The Business Once You’ve Hit the Plateau?
You Build the Team.
Notice that all of the rowers are in harmony?
“If you could get all the people in the organization rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time.” —Patrick Lencioni
Being successful is not about how great you are; it’s about how great your team is. The bigger a company gets, as it passes certain milestones—whether based on revenue or people—the more critical it is to understand that you will only be able to scale your company at the rate of your capacity as a leader. If you become that bottleneck—all of the work must pass through your desk first, because you don’t trust your staff to produce quality work on their own—then your business’s capacity to scale will be equally limited.
At any level of your company’s growth scale, it is important to understand this:
You need to hire and manage for where you want to be not for where you and your business are today.
My Story and Turn Around
In 2013, I came to realize that in order for me to grow my company to the next level, I would have to remove myself from many of the day-to-day operations and hire someone who could run their own department under my guidance. I hired an expert—someone skilled and experienced with operations. I quickly began to realize that I was looking forward to coming to work now that I had time to spend on things I actually enjoyed doing.
My strengths and passions were in the sales and marketing area, so it wasn’t that difficult to relinquish most of the control of operations to him—once I knew we had the right person in place.
There were many upsides to this decision.
All aspects of the business outside of sales and marketing began to run more smoothly.
I was able to focus on what I enjoyed doing: sales and marketing.
I found the time to focus on creating a new company vision and goals and worked on my leadership skills.
The lesson for me, and the one I want to leave you with, is that you can’t do everything. At least not well. You need to look at where your interests are and focus on those.
Another lesson? You need to recognize when the status quo isn’t working. Yes, it took the reality of a key team member leaving for me to come to that realization, but I knew I had to make some changes.
There’s an expression I am sure you’ve heard: “If you always do what you always did, you will always get what you always got.”
If your business isn’t as profitable as you would like, or has been stagnant for a few years, there’s a reason. If you’re working 80 hours a week and feel like you’re on a treadmill with no time off, again, there’s a reason.
As the leader of the organization, you need to find that reason and change direction.
Growth Tip 2: Understand What Your Time is Worth
When you first start your business, you do everything. Sales, service, web developer, marketing, bookkeeping, maybe even cleaning the toilets. I certainly was. When I started out, I was doing technical work, accounting, marketing, customer service, and anything else that the business required.
I remember the days when I would go to a sales appointment in a suit. When that appointment was finished, I would change in the car to jeans, a golf shirt, and tool belt and head to my next appointment to do a service call or installation. From there I would head back to the basement office to catch up on admin work.
That’s an extreme example, but the jack-of-all-trades mentality can be hard to shake. I know many business owners who are doing $1 million, $2 million, or in Frank’s case $6 million, and are still doing all of the business’s bookkeeping.
Why?
As entrepreneurs, we’re control freaks. We think, “No one else cares as much about my company as I do, so no will do it as well.”
Even if you’re not scrubbing toilets or changing clothes in the car, there are probably things you’re currently doing in your company that you shouldn’t be.
Once you scale your business past the first few team members, it becomes crucially important to understand what role you will play in building the business.
You need to constantly ask yourself the questions: What do I love doing? Where are my skills and interests? Where can I add the most value to the company?
What is your core competency? Is it sales? Marketing? Maybe software development?
Focus on Your Strengths and Delegate Your Weaknesses
For any aspect of the job that you’re not amazing at, hire people who can do it better than you. Train these people. Manage them. Motivate them. Treat them like gold.
Now keep doing that. Over and over and over again.
Start building a team of competent people around you who are experts in their respective fields. People that you can learn from. You don’t need to know more than they know. You need to make sure they are motivated, want to learn, and love coming to work every day. Now lead them, and get out of their way.
On a somewhat related note, I wrote a blog post titled: Watch out For Peter When You’re Growing Your Business or Rising the Corporate Ladder. Peter Can Kill Your Business If You’re Not Careful.
____________________
Here are some other blogs I think you might be interested in reading: I Work While I Drive. I Recommend You Try It, Too, and Your Career or Business Will Soar.
Want to know more about me and read some of the other interesting small business growth, profit and wealth stories I’ve written.
Here’s one of the first articles I wrote: My Journey Post Business Sale as I Sail Into a New Harbour.
Are you a younger entrepreneur? Here’s another interesting article I wrote:
My Response to an 18-Year-Old Who Wants to Become a Millionaire by the Time He’s 30.
My goal is to help entrepreneurs scale their business, improve profitability, and then, use those profits to create massive wealth. Subscribe to my blog to receive my latest thought on scaling your business and creating wealth.
Download my book and Amazon bestseller (number 1 in business, number 2 in non-fiction). You can get your FREE copy here.
