I sometimes refer to this threshold of growth as the good old days. I’m not exactly sure why but I do remember getting to this phase and breaking the elusive million. It was a memorable day.
Late one December we didn’t have much year left, we had a large drive in the shop to crank out some work and by the end of the month our projects just made it. Our volume had hit $1,100,000 that year. That was one of the highlights of our year and a great note to end on.
The next year we went from 1.1M to almost 1.6M, so there’s something about this threshold that once you break through the million dollar barrier, things just start to open up for you.
Normally during this growth phase, you start realizing that the company is getting beyond what you can handle as an individual. You become less of an owner/operator and start transitioning to more of just an owner.
This is not to say that you don’t still handle things around the shop or deal with day to day headaches because ‘you’re the boss.’ But you start to notice that for your growth to continue at a rate where you can break that million dollar threshold, it becomes more apparent that you need to focus on more owner type duties rather than still being an operator.
For my company, we stayed under a million for several years. However, once I figured out the recipe for how to grow, it became easy to blow right through that threshold.
To get through this phase a little easier there’s a few steps you can take.
The importance of a good team
First, you need to find a trusty and reliable right hand man. This is someone who is invested in the business with a passion to learn and grow as your company gets larger. Hire someone who you can train to create and operate systems efficiently that the rest of your staff will listen to and respect.
During this time, you can also teach your people to learn processes and implement them on their own. Instead of hand holding and micromanagement, you can create a culture of self starting employees that understand the vision of the company and can figure out solutions to issues by themselves.
A great way to do this is to have them read resources like 2 Second Lean. We found this to be a very easy and down to earth way to implement lean without the complicated verbiage and structure of a typical lean foundation.
Hire better. Hiring is a tricky art. I say that hiring is an art because it can take years to find out what works for you. We have some resources to help you hire better and some strategies to deploy to help you find more quality employees. If $10 an hour is what you’re going to pay, that’s the quality of work you’re going to get, but you still want the best employee at the $10 range.
When you’re able to offer more, you’ll find that you have a better crop of employees to choose from. These individuals will care more about the business and growth because they are able to see the opportunity in it for themselves.
Build your Brand
Use this phase as a time to hone in on what exactly you want your company to be.
So many times as younger businesses, we realize that we’ve become a ‘yes business.’ We just say yes to whatever work comes through the door. In order to not get stuck at this threshold and break through, you’ve got to understand what niche you excel at and what you want to be known for as a business.
Creating a vision is a great way to really narrow down your focus. A great way to understand this is to picture your vision as a lighthouse in the distance. While it’s true that you may never reach the lighthouse, you are always navigating toward that direction. If you stray too far, you can always look at the lighthouse to steer back on course and keep you on track.
Lastly, this is a great time to start automating your systems.
Your focus should be to work on systems that allow you to ‘fire yourself.’ Don’t get bogged down in day to day routines which are hindering your ability to keep the business growing. Whether these tasks are sales, design, or even cutting panels yourself on the shop floor, you need to learn to delegate and create systems so that you can fire yourself from these jobs and free up your schedule to step into the owner role.
This is such a huge milestone, because only a few businesses are able to hit the million dollar milestone. If you’re over $500k, enjoy this time and get ready to power through to become a million dollar business.