Growth Stages Operations Uncategorized

Stage 2 – Keep the momentum: Focus on these critical challenges

Stage 2 Company (11-19 employees)

You are not sure when it happened. But without really being cognizant of it, you have 14 employees. Fourteen people who now rely on you to ‘bring home the bacon’ so they can fry it up at home.

Ouch. You knew things were getting more difficult to manage. It was getting harder and harder to keep up with the flow of work. Your employees were sending you ‘not so subtle’ messages that unless you did something soon to ease their pain, it was you they might be ‘frying’.

You are now the proud owner of a Stage 2 company with between 11 – 19 employees. You just experienced one of two ‘chaos zones’ that companies move through as they grow. We call this a Flood Zone, which requires you to deal with a huge increase in the quantity of activity. Your first reaction to a Flood Zone is to add more people. Don’t.

Focus on Profit and Revenue

Instead, as the owner of a Stage 2 company, you need to focus on profit /revenue and getting critical processes in place. Avoid the trap of just throwing people at your problems. This mistake alone has accounted for too many businesses imploding too soon.

In talking to leaders who have made it to Stage 2, they are almost completely overwhelmed. You probably have not thought about shifting the responsibility of managing your 14 employees. You are not only trying to keep them on target with projects, but you still are doing everything you have been doing since you started your business.

When you get out of bed every morning, spend time organizing your day around these five activities. Make the commitment that you will address each one, at some level, every day.

These are five critical challenges you face as a Stage 2 leader:

  • Challenge #1: Hiring Quality People. Didn’t we just say above not to throw people at the problems? We’re not saying you should hire more people. We’re saying hire quality people. At this point, chances are you have one or two people on your staff right now that the company has outgrown. They are good people but the company has moved on, and they have not. Let them go and hire someone to whom you can begin delegating specific tasks.
  • Challenge #2: Improve Sales. You are no longer in survival mode. You have moved into growth mode. That’s why generating revenue through sales is so critical. Follow the money. Enough said.
  • Challenge #3: Manage Cash Flow. Track it daily if necessary but no less than weekly. Don’t let your expenses get ahead of you. When thinking about spending money on something, take time and inquire as to the reason for the decision. Ninety percent of CEOs think they make good decisions – 60% of them are a bust. This isn’t time to squander resources.
  • Challenge #4: Recognize the Leadership/Staff Gap. If you aren’t talking to your staff, individually, on a weekly basis – and I mean having a dialogue about how they are doing, what they need, how you can help them – you are looking at the beginnings of a communication chasm that you won’t be able to bridge. Start talking now – payoff is in spades.
  • Challenge #5: Limited Capital to Grow. This likely is a challenge that has dogged you since day one. Have you looked at your business model? Do you have a model that creates a recurring revenue stream? Passive income? Have you recently evaluated your pricing model?

Do not become complacent. Worse, don’t spend all your time working in your business. Intentionally think about your business. It is what will help get you to Stage 3 (20 to 34 employees).

This article, derived from content created by FlashPoint!, is based on the 7 Stages of Growth concepts developed by the Origin Institute and James Fischer. It was contributed by Jacqueline Sousa, a certified Growth Curve Specialist and regional director of the Florida SBDC at FIU.


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