You aren’t sure when it happened. But without really being cognizant of it, you now have 14 employees. Fourteen people (and their families) rely on you.
You know things are getting more difficult to manage. It’s getting harder and harder to keep up with the flow of work. Your employees are sending you ‘not so subtle’ messages that unless you do something soon to ease their pain, they are going to get too burned out.
You are now the proud owner of a Stage 2 company with between 11 – 19 employees. You just experienced a Flood Zone, one of two ‘chaos zones’ that companies move through as they grow. A Flood Zone requires you to bear up to an increase in the quantity of activity. Your first reaction to a Flood Zone is to add more people. Don’t.
Instead, as you Ramp Up in Stage 2, you need to be focused on Profit/Revenue, getting critical processes in place and avoid the trap of just ‘throwing more people at your problems’.
This mistake alone has accounted for too many businesses imploding too soon. There are five critical challenges you will face as a Stage 2 leader. In talking to leaders who have made it to Stage 2, they are usually completely overwhelmed.
You probably haven’t spent time thinking about ‘managers’ or shifting the responsibility of managing these 14 people to others yet – you are not only trying to keep them on target with projects, but you are still doing everything you’ve been doing since you started your business.
As a Stage 2 Business Owner, spend time organizing your day around these five activities. Make a commitment that you will address each one, at some level, every day.
Challenge #1: Hiring Quality People. But, Pam, you just said, “Don’t throw more people at your problems!” I’m not asking you to hire more people, I’m asking you to hire quality people. My guess is 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 haven’t. Let them go and hire someone you can begin delegating specific tasks to.
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 your cashflow 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 WHY of your 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 and don’t stop.
Challenge #5: Limited Capital to Grow. This is a challenge that has potentially dogged you since day one. It is typically true for companies in Stage 1 and Stage 2 who haven’t received venture funds. 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? Don’t get complacent. Worse, don’t spend all your time working IN your business. Intentionally think about your business. Find the time to work ON your business.
Congratulations on making it to Stage 2! Learn about Stage 3 companies to avoid getting to the ‘point of no return’ when it comes to business owner burnout.