The 7% Club
The 7% Club
Episode 11: 9 factors that will stop or propel growth beyond 2-million
In today's discussion, we uncover nine game-changing factors for business growth beyond the 2 million-dollar mark:
- Visionary leadership
- The paradox of growth
- Strategic business models
- Optimized products and services
- The business owner's mindset
- Fostering a strong company culture
- Effective people management
- Streamlined business structure
- The art of letting go
Join me as we explore how these factors reshape the path to exponential growth. Tune in for strategic insights and actionable wisdom, and remember, a better strategy fuels a better business and a better life.
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💡 Need help scaling your business from 7 to 8 figures? Get in touch jenny@jennystilwell.com.au
Remember: Better strategy, better business, better life! See you next time!
Hi there, this is Jenny Stilwell and welcome to the 7% Club podcast for the 7% of business owners who break through 2 million in sales and for those on track to join this club. If you want to upscale from seven to eight figures, you'll need to make some shifts in how you grow, structure and lead your company because you cannot get to 10 million in the same way that you reached your first one or two million in revenue. This podcast is to help you upscale. In today's episode, I'm going to be talking about nine factors that will stop or propel growth beyond$2 million. So a business may spend 10 years struggling to grow from 1 million to 2 million and just not get there in spite of consistent effort. But another business may take 10 years to grow to 10 million. So the CEO who takes advice and constantly learns how to be and do better is a world away from the frantic business owner who doesn't seek advice, won't listen even when advice is proffered, and consistently refuses to let go of anything and trust someone else. So many of my clients take around two to three years to double their turnover in a manageable way. And that's because they want to and are willing to take advice. Now, letting go a bit usually takes a while, but they all get there in the end. So there are many factors at play that will enable companies to either grow beyond$2 million or stay under that mark. Why do some businesses break through$2 million in sales and progress toward$10 million and others don't? And from all the research I've done and all the clients I've worked with over the years, there aren't any definitive explanations, but I do know there are some key considerations that will determine how far they go. So I'm just going to list each of them. There's nine factors here. The first is the vision of the owner. So without a vision of where the business is headed, it's going to be a challenge to justify the expense of investing in good people and and also to have the story that inspires them to join for the ride. So it's difficult to inspire a team with a big vision if there's little evidence of the company being on the path to achieving it. So as the company and the founder grow, this will come and it needs to come if there's going to be growth beyond two million. The second is what I call the paradox of growth. So the paradox is that in most businesses, in order to support revenue growth, more people are required. So as the business grows and more things are happening, more people are employed to help manage all of that. So more people add more cost, which of course erodes margins and profit. So hypothetically and theoretically, Often, the more you grow, the less you can potentially make. And that's why it's important to give so much focus to resourcing people and analysing the numbers, because these are the activities that are going to help make your business more efficient and more profitable. Forecasting resources, tracking those additional costs in alignment with key indicators, such as revenue per employee, for example, is going to give you the tools to manage this paradox. Number three is the business model. So there are so many wholesale, retail, online, B2B, B2C, product supply, service delivery, subscription models for software and IP. And so the list of potential business models goes on. But if a business model changes, it can require shifts in resources and core activities. Licensing and certification can require international commercial arrangements, separate financial entities and structures. Changing from a consulting model to an agency model with a team spread across different countries requires many shifts in how the business, the clients and the team are managed. Different business models have their own challenges and And if the founder decides to diversify into another business model or shift to a new model, it can impact growth in both a negative or a positive way, depending upon how that shift is managed. And that's the key. The next thing is products and services. So obviously, if the company's products and services aren't of the right quality and aren't competitive, or if there's limited need in the market, or or something in the mix isn't working, such as packaging and pricing, this will severely inhibit business growth. Another example is many businesses that provide both a design component prior to delivery of a service, such as interior designers, landscapers or brand agencies, make the mistake of not charging enough or charging at all for the design upfront. So they hope to win the business and then charge for the service delivery. But by doing this, they're only charging for half their product and service delivery. They may find the margins in their business are not enough to support the resources they need for continued expansion. So that then goes back to looking at fee structures and pricing arrangements and mapping out the full service of what you deliver for your clients end to end and making sure your pricing covers the costs of doing that. Number five is the business owner. So how driven the business owner is to grow and upscale, how much business experience they have, how willing they are to learn, how resilient they are, and their risk appetite, it all influences growth. Business owners need to understand what culture is and how to build it and know that it isn't just based on cool office spaces and fun perks. Person at the top needs to make roles and responsibilities clear, communicate effectively, let their team get on with it and acknowledge valuable contributions and efforts when they occur. So in a strong culture, people feel valued and appreciated. There's open communication. They know where they fit in the bigger picture and what they have to do and wins are celebrated. And all of that comes from the business owner and is going to help a business to upscale. The next point, and it's very similar to the one I've just made, is the approach to people. So business owners who genuinely care about their people and who provide the right structure for those people to thrive and to contribute are going to build a better culture in their company and they're more likely to have an A-team in place. And as such, they're going to find it easier to attract and retain people who contribute real value to the company. Now, Just a word on that. This care must be genuine. Otherwise, your team will see through it and they will eventually leave. So integrity in how you approach your people is really key. Number seven, the structure for managing your business. So business structure includes how the team is structured around the owner, having the right number of people and not too many overheads relative to your sales and margins. Clarity around roles and expectations for performance. Clear and efficient core processes that everyone can follow. And dashboards for reporting key numbers and ratios for managing the business. And I know I'm always going on about numbers and being all over your numbers, but I can't stress how important they are. You really have to understand that as they will be the primary way you can manage what's going on in your business. Number eight, commercial considerations. So these include things like the right pricing, supply agreements, customer contracts, insurances, risk assessment management, supply chain efficiencies and backup. Outsourcing functions where your business has no core competencies, if the cost benefit analysis works in your favor, can save costs of internal resources and business owner time and involvement. and speed up the company's core processes. And finally, number nine is the owner learning to let go. So you can't grow if you don't let go. Shifting from business owner to CEO and leader is essential as your company morphs from you and a handful of people to a sizable business with a growing team. And the only way to learn and develop is to get out of your comfort zone. So in his book, CEO Secrets, Dougal Shaw comments that founder CEOs focus more on driving sales revenue, whereas CEOs who have experience running other people's companies are more focused on structure and take a more considered and strategic approach to managing and growing a company. Now, the latter have no problem letting go because they have complete clarity as to what their role is. The founder CEO has to work it out. and it will take time to actually make that happen. So in my experience when a founder seeks external professional advice they will learn to let go and step up much sooner. That's it for today's episode. Bye now.
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SPEAKER_00:That's all for today's episode of the 7% Club. Thank you so much for listening. If you'd like advice and support on how to grow your business from seven to eight figures in a manageable and profitable way, then get in touch via my website, JennyStillwell.com.au. That's one L in the middle and two on the end. I'd love to help you. And as always, wherever you are in the world, remember, better strategy, better business, better life.
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