Beyond the Structured Ceiling
In our previous article we talked about how many businesses get stuck in the Start-Up Scramble and ways they can get unstuck. This article is for the businesses that have moved beyond that initial phase and have hit the next ceiling. One thing to understand about growing a business that doesn’t get talked about in business school or even much in the real world because people don’t realize it unless they’ve experienced it, is that there is always another ceiling. While the first really big ceiling is unique for each business, usually by the time a business has reached $250k in annual revenue, they have broken through the first ceiling and are out of the Start-Up Scramble. They've almost always grown a team. They're doing pretty well, but they still want to grow more. The problem is, what got them this far is no longer moving them forward. They've hit a ceiling, typically because the owner is still really involved in all of the activities of the business.
Accept when it is time to outsource some help
Have you ever heard someone – possibly you – say, “I wish I could clone myself because that's the only way my business will keep growing.” This is usually about the time they realize that they are the bottleneck in marketing, sales, estimates, operations, recruiting and so much more. It is a terrible feeling and a lot of pressure.
At this stage, the company eats up every bit of time, energy, and mental capacity that the owner has because she’s the engine that keeps things running. The business owner/founder/entrepreneur basically does everything and is running completely ragged. The team can only grow so large when they all report directly to one person, and nothing will change unless the owner is willing to transition from that state to a true business that can scale. It is here where you need to hire people who can make important decisions, manage processes and take some of the burden off your shoulders. Remember how scary it was back in the Start-Up Scramble when you took a leap of faith in your business and hired that first employee or contractor? The next addition probably felt a little easier, and by this point you likely have between five and twenty people on your team. You are an old pro when it comes to hiring employees now. But, get ready to feel that same discomfort you felt years ago at adding your first hire because now you need to hire your first manager. Expect all those same questions from the very beginning of your company to come back full force. Can I really afford this? Do I really need this? And, the temptation to just keep doing it yourself will definitely be there.
Think about the vision and long-term plan for your company
Here’s the thing: you don’t have to take this next step. You don’t have to keep growing, and for a number of people, if you have a great quality of life where you’re at, stop and ask yourself why you want to keep growing. I personally never want to have a 100-person CPA firm. I’d rather stay relatively small because I can still achieve all my goals this way. I was President of a 75-person company in the past, and I enjoyed that. But now I have three small kids, and I just don’t want to make the sacrifices it would take to get that big. Really spend some time thinking and discussing with people you trust about your motivations, what you want from your business and if you want to make this step. (By the way, if you don’t have a written vision for your company that you use to make important decisions like this, you’re driving without a map.) Objectively figure out what you want your business to accomplish and do for you, and make your decisions based on that.
Breaking through this second major business ceiling (remember breaking through the Start-Up Scramble ceiling was your first one) requires you to have team members who are true decision-making managers. It might take just one manager, or several, to get through your business’ Structured Ceiling. You might already have a supervisor or two, but when I’m talking about a manager here, I mean something different from a supervisor. The key is not just giving a manager responsibility for tasks, like bookkeeping, marketing, sales or operations, but allowing them to manage people by delegating true authority to them. It really doesn’t matter where these people are, they can be in your office, remote employees or even contractors. What does matter is that you as the owner turn over responsibility to them so you can free up your time for other things. You will go from having 20 employees who report directly to you to a handful who each have people reporting to them. You no longer have to make every single decision personally. It’s likely one of the scariest things you will do in your business life. It will feel uncomfortable at first. But if you do it the right way, hiring the right people and empowering them in the right way, will lift a huge weight off your shoulders and you’ll wonder why you didn’t do this years ago.
When the entrepreneur who started the business does not have be personally responsible for every single thing in the business, real growth can happen. This is what is meant by the term having a “scalable business.” If you get this system in place when you’re a $3 million annual business, you can easily grow to $10 or $20 million by just adding more managers and people who report to them. It will likely be years and millions of dollars in sales before you hit your next major ceiling.
Empower your leadership
Up to this point, the business owner has been the person filling every one of these responsibility seats. But once the business owner can find people who are both competent and trustworthy to fill these roles, amazing things can happen. I became the President of a company with 75 employees that previously had one person making virtually all of the decisions. By empowering high quality leaders with defined roles and setting up a class of supervisors underneath that, the company grew exponentially.
Doing this also allows you to enjoy your business more than you may have ever thought possible. You can actually go on vacation without stress because you have a solid team who can take care of things back at the office. This is actually a really good test of whether or not you have actually taken the step of empowering people or if you are just doing it halfway. Many owners have a “manager” who they don’t really trust to make decisions without second guessing them. If you have a strong vision of where you want your business to go and a manager who is highly aligned with you, you can trust that even if they don’t do exactly what you would have done in a situation, they will still make a right decision. Once you have made this shift, you will find that you can stop worrying about your business all the time and reap the rewards from the hard work you have put into your business.
Maybe you are hitting the Structured Ceiling, where your business is all on your shoulders and you want to move beyond that stress; we can help. We work best with business owners who want growth, are not afraid to invest their time and resources to achieve it, and are open to advice on how to get there. If this sounds like you, I would love to get together to talk about how much more enjoyable your business can be.