As your company grows it becomes different not just bigger
Most people track company growth by revenue. One generating $10M in revenue is twice as big as one generating $5M. That’s not very useful as the are many things that affect a company’s revenue, most importantly the industry it’s in. So it’s useless to make general statements like at $2M a company should focus on this but at $7M it focuses on that. A $5M software company is quite different from a $5M restaurant.
In my work with owners and CEOs of SMB companies, I’ve found a more useful way to track growth is by looking at what the person at the top spends most of their time and effort trying to accomplish. I originally got the idea of stages from a book by John Brown called Exit Planning, the Definitive Guide, where he talks about the wealth that is generated within the company at different stages, and hence the type of exit strategy you need.
I have embellished that quite a bit based on the work that I’ve done with business owners. The initial focus is on where the person at the top spends their time. And I found these three stages to be a very useful tool to help business owners see that where they spend their time needs to change as the company grows.
I also noticed many other characteristics that change as companies grow which I’ve incorporated into a eBook.
Two things to note.
There are no concrete divisions between stages, it’s very much a continuum.
It’s also quite common that companies are in one stage with some of these characteristics and in a different stage in the others.
Keep this in mind as you plot your companies position and growth.
Download the eBook in PDF format here:
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