How to build a successful company after the $1 million mark
For starting entrepreneurs, getting your company off the ground is always an exciting thrill ride. It’s the early stage where you as the business owner are working at full speed, your team is small and agile, and you’re making lots of fast decisions. The focus is on revenue and taking big risks—and the hard work often pays off into big rewards.
But what happens when your startup is successful and hits that coveted $1 million in sales? What comes next?
For many entrepreneurs, it can be hard to shake off the startup mentality. But when a company reaches that size, the scrappy startup needs to transform into a well-oiled machine. To do that requires not just focusing on revenue and growing business, but also on building a solid organization with the company.
Understand your financials so you know where to save and spend
Reaching that first million in revenue can make it quite tempting to expand the product line or invest in marketing to keep the pace of sales going. But now is actually the time to step back and thoroughly evaluate your needs. Look at your profit & loss statement and your balance sheet to see if your results justify your current spending.
By analyzing your financials, you can see where you need to save and spend. Perhaps instead of adding an additional marketing campaign, funds would be better spent strengthening customer service for existing clients. Or instead of expanding the product line, you may choose to reduce production costs on your current products.
Establish and delineate responsibilities
In the early stages of a company, the owner and entire team often wear a lot of different hats. It makes it easier to be flexible and to quickly adapt to challenges ahead. But for large businesses, this becomes untenable for all parties. As a business owner, it is important to delineate duties and assign employees with a specific set of responsibilities for the company. This sets expectations and accountability on both sides.
It is also important to focus on areas of strengths—just because your sales manager has been responsible for updating the company website since the beginning doesn’t mean she should keep doing it. Create teams and departments where they make sense so you can have better oversight on the different aspects of your company.
Hire people who are different than you
There’s a tendency amongst business owners to look for people who are similar to them, not only in their skill sets but also in their views, tendencies, and characteristics. It’s easy to see how and why that happens—usually we take a liking to people who act and think like we do, and we usually hire people we like.
However, too many like-minded personalities in one company can create huge problems down the road. A company full of artsy dreamers will never get anything done if no one is looking after the small details. Likewise, a management team full of Ivy League MBA grads will not bring the different types of viewpoints needed to spark creativity and innovation. Make diversity a priority in your hiring, and look to balance out skills sets and personalities amongst your team.
Understand your management style so you can be a better leader
Leaders come in all shapes and sizes. And while no management style is necessarily better than the other, the best leaders are the ones who are aware of it. They understand their characteristics, strengths, and weaknesses.
Tap into resources such as the DiSC Profile or the Myers-Briggs Type Indicator to help you discover more about your behavior, personality, and temperament. By understanding your own management style better, you can improve team dynamics, make smarter hiring decisions, and improve productivity and effectiveness across your organization.
The end goal
The shift from startup to well-established company is not always the smoothest transition, but business owners who step back and look at the bigger picture early on will be in much better shape. Ultimately what takes a company from the $1 million mark to the $10 million mark and beyond is building a solid organization that can grown successfully and sustainably into the future.