By Patt DeDominic
As a business coach, I see it all the time. I see smart, energetic entrepreneurs who have succeeded well beyond their first dreams, or those of their parents.
They’re helming multimillion-dollar companies. Yet for so many of them, they plateau beneath the elusive $10 million mark, while peers and competitors outpace them.
Why is that?
There are many reasons, but I’ll focus on the top three in this article. It’s based on my observations in my 10-plus years as a business coach. It’s also based on my more than a quarter century, before that, as an entrepreneur myself, who was able to crack that $10 million ceiling many times over.
Reason 1: You don’t have a handle on your scalable customer base
If you’re trying to surpass $10 million, ask yourself, “What’s the business model to get me to $20 million?” No, that’s not a typo. That’s a deliberate direction for you to aim high.
This, of course, predicates upon knowing not only who your customers are, but who the right ones are. Identify your most profitable niche, being careful not to spread yourself too thin. Most marketing experts know that it takes a much bigger budget to sell to the entire universe of potential buyers for any business.
After you’ve identified this target group, craft a plan to sell to them. Study their journey. Are you exceeding their expectations? Are you continually working to anticipate their needs and deliver more value to them? Err on the side of under-selling and over-delivering.
Now let’s get back to the math. If you want to crack the $10 million ceiling, focus on $20 million in sales. For my $100 million clients, I have them focus on $250 million. Now imagine what your company must look like, and what kind of business model it needs, to generate and support those kinds of numbers:
- What type of sales funnel must you have?
- What kind of closing process would be required?
- Could your current customer-onboarding system accommodate double its current volume?
Here’s what comes as a pleasant surprise to many of my coaching clients: Doubling your business does not require doubling your hours, or even your headcount. You could realize 100-percent growth by adding only 10 to 30 percent more staff, so long as you productively brainstorm, and upgrade your systems and business processes, addressing who does what and when.
Take advantage of technology, too. Remember: You need a platform not for your business today, but rather for the size you want it to be in 18 to 36 months. Think big. You can do it!
Reason 2: You’re trying to do it all yourself
In all my years of business coaching, I have never seen a $10 million one-man (or one-woman) band.
I’ve found that successful business owners in the $25 to $200 million-a-year range come in all stripes, with all kinds of management styles. I’ve seen authoritarian, autocratic, permissive, paternalistic, democratic, empowering and collaborative. All of these can work, at the right time and the right place. But they require big outside-yourself thinking.
Owners who are stuck in smaller businesses are the victims of smaller mindsets. They tend to surround themselves with people who just do their bidding, or are afraid to disagree. (Who, after all, knows more than the all-knowing founder?) But this creates an unintentional dependency with paternalistic or “let me do it” styles that stifle experimentation. While hurting the company’s performance and potential, it also hobbles the people within it. It robs them of the opportunity to learn from their own failures and experiences — not to mention the pride that’s earned from surmounting obstacles.
My two words of advice for you? Stand back! Delegate more. Stop believing your own public relations that proclaims you the sole and best expert in your field.
This, incidentally, segues nicely to the third big roadblock to $10 million:
Reason 3: You lack the team required to succeed in key business areas
If you want to grow past $10 million in sales, it’s vital that you surround yourself with people who can be trusted with a whole bunch of $20-million (remember: Aim high!) decisions.
You don’t need to — in fact, you shouldn’t try to — be it all, or do it all. You must work to make a profit, and reinvest in the business by hiring and mentoring the right leaders. As I’d hinted in Reason No. 2, your team will do more, and take you far past the $10 million mark when they have the support, technology and tools to serve the customer well. That’s what will happen when you and your management team have selected the optimum customer niches to serve, earning you not only profit but enjoyment in the day-to-day operations of what your team does well.
Share the sweetness of victory. Enable your team to take enough risks that they can realize that failures are essential prerequisites for breakthroughs.
Notice that I mentioned “key business areas” in the name of Reason No. 3. Make sure you have a competent champion as a leader of each key project or pillar of your business. You’ll need leadership for sales and marketing, finance, accounting, team leadership and product or service fulfillment.
Remember — and reiterating Reason No. 2 — you can’t do all these jobs yourself. If you try it, you’ll end up with a game-breaking, part-time leader who may (or may not) be an expert.
For me, I’ll take an enthusiastic eager learner surrounded by resources over a tired, bossy CEO any day. Don’t play every instrument in the orchestra. Be the conductor. Enlist the exciting contributions of mere mortals to make goals to take your company over $100 million. It can be done. I help my clients do it all the time.
Solvang resident Patty DeDominic is a veteran entrepreneur who has been coaching many Santa Barbara company owners for years. She can be reached at [email protected]