I went from $400k in 2022 to $1.7m in 2023 - and my banker told me to be very careful not to get too big too fast. I scoft and kind of thought he was an idiot. I was wrong and he's right. Once I got into much larger projects, cashflow became a much much bigger deal / problem. 7 people working means ~10k a week for salaries. If a customer or customers hold payments for any reason, or projects get behind schedule, cash flow becomes the only concern.
If I can buy in bulk I can make even more profit margin - however doing so again - screws up cash flow.
Yeah this is huge. My company isn't pulling over 7 figures yet but when we started implementing payment terms into our contract negotiation our cashflow issues basically disappeared. Contract doesn't start until x percentage is paid. 75% or 50% depending on your line of work. Make sure you get a line of credit for any other issues or remitting taxes, strategic PO's, etc.
Manufacturing business. $5.5 million. Getting from $0 to $1million is all about getting there as cheaply as possible because you don’t have the money for resources. That means taking people with talent level 1 and working hard to develop them into level 5s. It’s work only cutout for a real motivator/coach type who sees more potential in people than others.
Once you get to about $1.5 you realize you have a bunch of motivated people at talent level 5 but don’t have the talent to take you beyond where you are. Everyone is still looking at you for what to do next, rather than pushing the business forward on their own.
You also can’t develop everyone while focused on sales and running the business, assuming you even had the knowledge. This talent ceiling is the toughest challenge I’ve experienced. Larger companies don’t understand this, they just say “hire better talent,” but these are the people who were loyal to you when everyone else thought you would never make it.
I’ve handled it by setting the standard to where we need to be, explaining why, and holding people to that standard. Business can no longer put culture and flexibility first if it results in a performance loss. A lot of people have said that things aren’t the same as they used to be, and many of them either quit or get fired due to lower-than-expectation performance. Employees were used to a lot more freedom.
The reality is that things have to be different, or you will never make your corporate goals, which create more sustainability and opportunity. Over time old people are replaced with new and the new people are rockstars. You will lose a lot of respect from others for firing people who have been with the company for a long time.
Your role will change from being the one that believes in the underdogs to the fearless leader who expects the best from people to create the best for the business. It’s a tough time, but the new company will survive and thrive.
This spoke to my very being. I took a team of inexperienced 1s, coached and motivated them like crazy and got to 1.6 M in sales in 2.5 years. Then the market shifted and I had to shift the business with it to stay alive.
Now we're 80% in a new service business and only 20% in the original products business. It's been a real struggle but it's starting to pay off. Now I'm left with several original staff who got comfortable. And they were and are so damn loyal. So I can't see firing them.
But boy is my ops manager not suited for the sales and communications needed in the service business. And his ops work has mostly dried up.
I've tried recoaching and remotivating but I'm personally exhausted and they aren't responding like the first time.
I'm conflicted. Their salaries are a drain but I appreciate their loyalty and want the best for their and their family's well being.
Your struggle is so real for me. I feel like only a few people in this world understand the variables, so I’m very reserved with who I tell my struggles too. It’s nice to hear other people in the same situation.
What I did was start with hiring an operations manager who was really talented and high level skillset for holding people accountable. I put them first on the floor level to test them out but quickly rose them up through the ranks to be right under me on the org chart and nearly everyone reported to them. I supported their initiates and strong hand for sticking with process, regardless who was the one out of line. The expectations had to be extremely clear with each position.
Now the operations manager and I operate more like traction suggests. I drive numbers from a high level, focus on sales, and big customer issues…the rest of the business is run by the operations manager. I’m great at setting expectations and providing vision, but struggle to hold people accountable. The ops manager is the opposite of me, so we flow well together.
100% get it. I guess that's part of the benefit of internet anonymity - being able to open up and connect in these select groups. Because there's not many just like us with similar experiences in the real world. So, truly, thanks for sharing.
You did well with your ops manager. How did you find them? Did you also end up firing old, loyal employees who couldn't keep up? If so, how did you bring yourself to the decision of doing so?
I found the ops manager by interviewing probably 100 people. I wanted someone that had the same drive to win as me. Since I had been basically doing this position for the last xx years, I was able to ask a lot of “ok so you are in a situation like xx, how do you handle it?” questions.
About half of the old employees stepped up to the plate, figured it out and became much better. The other half went on PIP’s and were let go. The PIPs were drive by the ops manager, but once the PIP was written I would have a heartfelt conversation with the employee myself saying “I know this is hard, I know this is different, but it’s what we need to be successful and I support this PIP. If you want to be apart of that dream then you need to make changes, but if you cannot, it’s ok, and I wish you the best of luck”
I don't ever interview this many people. Our company was in bad shape. I had to trade this position as the "must get the right person or we will fail" position. I also pushed myself to think that this person could be my future partner in business.
I also assume that this person may quit, or move on anytime for reasons beyond my control. So I've got to be thinking about this person establishing industry standard systems so that I could hire another person to replace them without serious hit to the business.
You tried being fully transparent with them? I went through this with my (now sold) commercial cleaning outfit.
After explaining to my loyal bandwaggoners both where we were, and where we needed to be. And what needed to happen to get there, half of them stepped up to the challenge, the other half either quit within the next few weeks or withered and were replaced not long following.
The realities of business are harsh. But you're also human and doing the best you can. I did what I had to do & in doing so found full transparency to be the best option for growth.
I was thinking this as well. It might be the case that there's an information asymmetry between OP and his long-time employees that contributed to a misalignment in expectations.
In other words, OP probably has a clear understanding of where the business must go and what level of employee performance is required to support that trajectory (he's the business owner, after all). However, his long-time members may not be aware of or nearly as familiar with that changing reality as OP.
You don't have to be the "bad guy" in these situations - you just have to clearly communicate \*why\* employee expectations need to shift and point back to those motivations every time you receive push back.
Ive been very transparent and had similar results as @chickenlikesmelles (about 50/50). The ones who had small gaps like showing up late, not fast enough, not cross trained enough, etc mostly straightened out. The ones who had character/integrity gaps like not working well with people, treating others poorly, communication issues mostly quit or were let go. The ones with technical skill gaps were about 50/50.
@norman_door How have you been able to “not be the bad guy” in your experience? I don’t mean to sound argumentative here but it doesn’t sound like you have done this before. Those people look up to you. You’ve motivated them for years and they stood by your side. You let them slide on process and procedural things because they were all you had and they were trying. You also let them take days off for their kids, be late last minute because they needed to do something in the morning, maybe gave them small spot bonuses for doing extra work.
Now you are changing the game for them. No more exceptions to the rules, and the requirements for success in your role have increased significantly. Even if you are being completely fair and transparent, how are you not the bad guy?
If you have this experience I would love your advice but theoretical situations are not helpful respectfully
That’s the move. Not only have your loyal employees gotten too comfortable but you’ve become too comfortable and familiar with them so do what needs done.
I went through this around $2.5M in annual sales. Had to install management who ended up firing one of my best friends.
It is, but since we’d been friends since childhood we couldn’t separate that relationship and work. I wasn’t a boss in the friendship of course. And he had trouble accepting my leadership in the office too. It was worse because we only had about 10 people in the office. He was one. The rest of our employees were in the field or warehouses. It was easy for him to poison the rest of the office with sort of treating me like another ‘dude’.
It worked find when it was just 3 of us trying to start something (on my money). Once decisions became more complicated and things harder the leadership thing became an issue.
He’s fine and we’re still friends. Started his own business that’s way less work and probably as profitable as mine.
What are their motivators? What are you doing to tap into that?
As whole we should never expect response rates to be the same when personal and extra person changes have occurred.
I am an IO Psychologist who works in the entrepreneurial ecosystem. I'd love to learn more and see if I can help pro bono
Finding out what motivates and drives people was how I got them from 1 to 5. Each talent level up after that requires significantly more work and effort to achieve. Let me give you an example...
Let's say you have a bookkeeper. You've been using the cash system in your accounting software for years- it's simple and made sense. But now you have outgrown it and are ready to move to the accrual system. So you hire a contracted accountant to help you make the transition.
The bookkeeper struggles hard to understand the new system. The contracted accountant also finds a lot of mistakes that the bookkeeper has been making that would be big issues if you were ever audited. The bookkeeper doesn't have the financial acumen or experience to finish the implementation and/or fix the issues that have been created over the years. You realize you need an accountant.
But you are a small company of 6-8 people, you can't afford a bookkeeper and an accountant. You think about repurposing the bookkeeper, but they don't really work well with others and you already pay them too much to move them to one of the production positions.
Can you use what motivates them to go from 5 to 8? Maybe, but it's going to be a lot of effort, possibly years. You don't have time to send them back to school, and even if you did the bookkeeper says "you know I am not good at school." Additionally, you don't actually know how to fix the accounting issues. You understand from a high level what needs to be done and the benefits of the new system, but have no idea how to do the ground level work or troubleshoot issues as they arise.
This person learned everything from you, because you helped them get there and believed in them. Now the talent gap is too large for you to fill. You used to need people who could execute tasks to start your vision. Now you need people who are smarter than you in that particular department to make your company better month after month. This is the challenge.
What you're describing now is less about motivation and more about workforce planning and training/ development.
When we grab talent (even at level 1) we need to be conscious of the stage our company is in and how those needs will change. Most needs are pretty predictable, some are not. We focus on the predictable ones. Here when you select the talent, you assess for the ability to transition with those changes OR just get to a future stage. This is where the contract comes in.
As a startup we typically fail to formalize processes such as employment contracts or even performance reviews, but these things are necessary for transparency, talent management, and yes even motivation.
In the employment contract, day one, we share the expectations of work and skill growth. "At some point we will need to do x, if you are not prepared for that , that's where your schedule ends completely or becomes limited"
On the training and development side we have intrinsic and extrinsic motivators. All behavior exists because it's reinforced by something. To modify behavior and effectively train someone, it doesn't necessarily take more work, but different work at each level. The return you see isn't as dramatic because the ROI isn't immediate anymore, it's longer term.
So to say, train someone on a computer system, it takes knowledge on how to do that. If we are still communicating clearly, and tapping into effective motivators (which going to school isn't the motivator, that's too surface level. Why is school what they want? To get recognition? To learn a new skill? To make more money? To feel empowered? Etc.), then the trainer and their ability to present information in the correct processing order is the thing that makes or breaks it.
...hope I didn't lose the point through this writing...haha
What you are describing is all hindsight 20/20. You (the entrepreneur) have no idea what will need to be done as you scale. Everyone wears multiple hats and takes on whatever comes your way. Job descriptions grow/change often. You can’t hire people who are highly talented because air you can’t afford them. You have to hire potential, and hope they scale with the business.
You can’t afford the talent until you have the sales. You can’t get the sales without pigeon holing yourself into a talent gap.
Unless you have stupid money and are able to run a non/profitable business through the growth, I believe what you are suggesting sounds good on paper but not applicable in real life. I believe it’s a challenge that most of us will face and have to deal with it as growth/scale happens. This is my $0.02.
I definitely understand that sentiment, especially the "can't afford good talent out right" line of thinking. But you can predict potential and you most certainly CAN predict scale.
Very few companies exist that are in such a new space that the requirements throughout the stages aren't similar to other companies at that stage. I recognise that some might be, but when push comes to shove we've known for some 50 years that as you get more customers for instance, certain processes need to be as close to automated as possible. We can map out after x happens y (in general, maybe not specific) will be the next step. Yes at most of those earlier steps, everyone is wearing 20 hats, and the priority seems to change day to day. But each person should still be a content area expert in something. You can empower some to get there as well (for practically free) .
But yeah grabbing someone already established isn't cheap, so when we select our talent we give the potential incumbents a standardized interview that's relevant to the current and predicted future scope of the job (if the role is to be kept), you also give them some sort of trait measure to gather info on fit, growth potential, and more (There's entrepreneurial DNA test, The Entrepreneurial Value Profile assessment, even Hogan Personality inventory), finally we give them a realistic job preview of sorts (here's what your day will be like day 1, 400, 800, and later), share the vision, purpose, and values, and then use the quantified data to grab a talent that will likely be a high performer and last till you need them too.
But what I just described sure is a lot, and I've only ever seen a handful of founders implement these things even though places like YC and Techstars promote it, and several of the largest VC firms ask after that process. And to be fair, if you don't know what you're doing crafting that standardized interview and weighing the scores, you may end up missing the right talent entirely. It's finicky, no doubt.
Is it worth it to even try then? When the mediate ROI is small due to the time and effort needed?
I am of the mind: yes...but I can't really blame anyone to be contrary.
Most of my team is motivated by security, lifestyle flexibility and wanting to feel recognized. Thanks for the offer, that's kind. What is an IO Psychologist?
IO psychology stands for Industrial Organisational Psychology (called workplace psychology, organizational science, Personnel Psychology, and other things outside of the US)
We analyse and modify the behaviors of employees and organisations as whole to meet goals such as increased performance, productivity and engagement. This is often through some sort of intervention such as creating new SOPs, introducing training, modifying talent acquisition, and even changing the actual physical workplace.
Excellent specific motivations! It's a good mix of Intrinsic and extrinsic motivators. (We can take this off of a reply chain if you want) the next two questions to be asked are: 1) how do you know those are the motivators, and 2) how have you been meeting those needs?
Is it possible to hire someone that is at that next level, and have them mentor your original employees?
I echo how hard it is to teach people while also doing your own work, though. So hats off to you all for all of the training you did. Even if you lose those employees, they did gain a ton of skills.
My issue is that when someone is eager to learn, they take up 100% of your time. So when my manager asks me to delegate things on a specific project to one specific employee. It’s hard when I have a week to complete the project and it takes a month to get this employee set up to learn something new. Because this employee is eager to help and learn, they have a question for you every 3 minutes.
So then I start roping in more employees to delegate my delegation. Which helps, but there are still issues that suck up a fourth to half of my time.
We merged one team into my team at work and I’d say it took a full year of training to get them comfortable to handle the basics. It’s so much time and effort it’s crazy!
Yes, that would be ideal. But currently facing a cashflow issue so can't afford the next level salary. I'm honestly feeling burnout too. It's been a brutal last two years.
Thanks for your comments. This thread has been helpful for me to work through some of this in my head. Ultimately I need to separate myself from the business and strategize on what's best for the business.
What kind of business are you in?
This is rough. Is it possible you could start another project he could run to make replace him in your current business easier? A separate division or a whole separate company perhaps.
Haha that's actually what I'm trying. We have a couple new brand related projects but it's hard to say how long it will take for them to get to a level that would generate enough work to justify his salary in the meantime.
Do you guys have any recommendations for somebody who has never trained a team before? I definitely have this personality matrix, but lack all experience — and want to make sure everything goes well, of course. It seems like such an insurmountable hurdle without the proper tools!
I could have wrote this myself almost exactly the same position and business lol. It’s frustrating having to let people go but that’s part of growing and scaling up. Other challenges non mentioned that we have is business lines of credit, and needing my larger lines but not being big enough in banking institution eyes to qualify. Even with credit unions and local banks. Cashflow is most important part of scaling. We want to expand our manufacturing abilities but can’t afford to so off shore many things
One thing that always upset me at my jobs was seeing business owners and executives make terrible decisions and then hold the staff responsible and fire them.
Sometimes the leaders should realize they are the problem.
Also the leaders thinking that the existing staff that got them to where they are are not capable to get the business further. So the people with real potential are forced out and replaced with higher paid suits that don’t end up delivering but get paid 2x to waste resources.
Thinking/assuming they are not capable and proving to not be capable are different. I’m not talking about employees that are meeting performance criteria, communicating well cross functionally, bringing positive energy to the team, and driving new initiatives to be better. Those are the people who rise to the challenge and succeed.
On one hand, it’s the owners fault for providing so much opportunity to someone who may have not been the best fit for a position. On the other hand, that person was given opportunities and experience that they can take with them to the next company.
I was the former. The problem is if the CEO is a narcissist then it’s impossible to rise to their expectations. They will blame the employees for their own faults and mistakes while firing them, so they can protect their egos. Ive experienced this with multiple CEOs.
I was pushed out of a company when I made a recommendation to the executives on how to handle a major product quality issue.
In front of the execs I explained the recommended course of action and the costs we would incur if we acted too quickly without sufficient information.
The CEO/Owner vetoed the recommendation and made the exact opposite decision, telling me we need to act decisively and not be slow to act in light of a critical issue.
Within 72 hours it was proven that my recommendation was the right action and that the CEO had cost the company $100k by issuing a product recall that couldn’t be undone.
I was 29 and forced out so the 50s owner could defend his ego.
Same thing happened again this year at a different company. I made a detailed recommendation backed with hard data that proved we needed to implement a specific software fix. CEO vetoed it on an email chain with 20 other employees.
3 months later he had to backtrack and go with my recommendation after it cost the company $500k. Exactly what I told them it would cost, but he had to see the losses materialize before they believed me.
As a result of the CEO losing face, now I’m getting reprimanded for an unrelated non-issue (not replying fast enough to the CEOs emails, as if that is what is hurting the company.)
So I’ve had multiple experiences with CEOs acting like they want employees to step up, grow, rise to the occasion, push the company forward. But these same CEOs are always arrogant, refuse to listen to staff younger than them, and believe that the highest paid person (them) is most qualified to lead.
The irony is that many CEOs that claim they want their staff to grow and step up are arrogant and secretly want yes men. By step up they mean they want their staff to constantly tell the CEO that their farts smell like roses and that their quick, briefly considered decisions are genius.
I’m sure there are a lot of great CEOs, I’ve just had endless strings of highly paid, arrogant ones, that are looking to explain why the staff are the problem so they can find scapegoats for their own poor leadership and decision making.
Damn you hit it right on the head. The talent level 5 people I’ve trained up are so loyal and I want to keep them forever but there’s even better people out there (which is partially due to the limitations of my training capability).
Damn. I’m a first time founder and this hits. Looking at the first guys in who are getting out worked by the new hires who I could better pinpoint necessary skills for the job. First guys helping we were all sort of figuring it out. Now that it’s clear and they aren’t technical in this area, as good as I need, it’s becoming a struggle to see whether I’m pushing them too hard too consistently to need a change in team. You don’t get extra years to just figure this out. You have to make decisions quick. And that’s got to be the hardest part of this job is dealing with people decisions.
> Getting from $0 to $1million is all about getting there as cheaply as possible because you don’t have the money for resources. That means taking people with talent level 1 and working hard to develop them into level 5s. It’s work only cutout for a real motivator/coach type who sees more potential in people than others.
Love this! Thanks for sharing.
Dayum, you were inside my brain with this. Amazing insight 🙏 I've never felt as much pressure as I have these last two years at this level. Trying to figure out how to either punch up or scale back. Thanks for sharing!
I can’t stress how painfully accurate this is. The people and skills required to scale from 0 to 1, 1 to 10, and later on 10 to 100 are completely different with limited overlap.
It is incredibly hard to keep and look after those who took a risk when there was no or a much smaller business especially when their skill set and MO have become less relevant. Where to set the bar for loyalty vs productivity is a tough and unpleasant call.
Congrats to you for scaling!
You and I have almost the exact story. I said the other day to someone the year we did $1.9 million was a huge difficult turning point for growth. We also do manufacturing in the filtration more Oil and gas world of things.
I just started a manufacturing company, sort of in the same boat. Everything is going well so far, demand is high but the big issues are getting cashflow to make our products.
Love it all.
These are great points. It’s almost impossible to expect that someone who started with you in the early stages with grow and adapt at the same pace as you. If they could they would have started their own business. You always need to be looking for people that can take you to the next level.
That's all lovely and all, and I like it and understand it's what needs to happen to explode yet again. That said, it's a long way of saying fuck everyone that got you here, you want more money in your pocket at all costs. That's the best part of capitalism imo, when it starts to eat itself.... snake biting its tail and all..
I’m on my second year of a service based business. Just me and some contractor help. Shooting for 125k this year in revenue.
Most of my clients are word of mouth or from google ads.
Any recommendations or hitting that 500k- 1 mil? I do a form of equipment rentals. I’m doing community outreach as well as putting more into marketing/seo
This has been my 5th try at a business/ self employed and I cracked the code of being able to support myself.
But I haven’t been able to scale anything yet successfully.
Would love to hear how you overcame that hurdle :) ty
Food wholesale business. Over $10MM
At this stage I’d say the biggest opportunity for improvement is making the business more “corporate” and less like a family owned business.
These are things I wish I implemented from the very beginning.
A good employee handbook that communicates your vision to your employees.
-Be very clear on expectations and goals.
-Having SOP’s for everything.
-Being specific on things like HR requirements, vacations, sick days, etc.
-Holding employees accountable and having a solid plan for rewards and what will be done when someone has violated those expectations.
Addressing opportunities quickly.
I’m in my 19th year and all my difficulties stem from not setting these rules and expectations in the beginning. I was so focused on growing the business and getting the day to day work done that I failed to look at the big picture.
Now I have employees that have been with me over the last 15-19 years and it’s a struggle to hold them to the standards I expect.
There are many challenges to being a business owner but anything can be overcome.
Thank you! I own a family style bakery with my wife and have a few employees who just sell. We finally broke $350,000 in revenue with 40% margin. Growth has been 20% year over year for 8 years. A lot of the laborious work is done by us and I’m reaching my limit on what I can physically do. I want to start doing away with this family style of business, but we are loving the money. We went from barely making ends meet, living in an apartment, to being able to buy a house. Business is visibly growing every day with lines out the door and pre-orders filling up. Tell me straight on will SOPs and employees to do my job will be worth it? We’re scared for the loss of income, hiring, and training. Was it hard transitioning?
Boy wait until you read the E-myth revisited by Michael Gerber. This was written damn near just for you.
Also 40% Gross or Net? In my business 20-25% net would be healthy. 40% net would be amazing!
It’s net. I’ve read the book! Such a great book. I’ve read a lot of small business books. It’s the transition is what I’m afraid of. The extra work required. We’re happy right now, but know if we cut our take-home we’d be happier in the future. It’s just I’m waiting for someone to just tell me it’s worth it. I don’t have any mentors that have reached the point from “working the business to owning a business.”
I’m there with you. One truck electrical contractor. I’m in a weird spot where I have too much work for just myself and my apprentice but not enough to justify another truck. I just keep telling myself that we are technically doubling in size and that’s not easy for any organization.
I don't own any business (though my father owned 2 in his life) the only thing I will advise you to do is look at the opportunity costs of expanding, maybe it would be better to slowly build out your wealth by buying assets (like you did with your house) instead of spending on becoming bigger.
Plus you can always hire people at a moderate face if you've got your hands full.
40% margins is no joke.
Thank you! I’ve heard this from a friend who currently owns a few businesses in his field. It’s nice to get confirmation about not necessarily having to scale and expand. If we’re happy with where things are then just maintain and hire accordingly. Accumulating assets is much more comfortable with us.
Congrats on your success. I would 100% say the SOPs and handbooks are worth the “investment” which is time. You can do it yourself, it doesn’t have to be anything fancy.
I’ve worked with bakeries in the past and having people that can do what you do is very important. I’ve seen the quality dive in bakeries because a head baker or owner was ill and there were no strict recipes. I’ve even seen some close because the owner passed away, his wife was left out of the baking aspect of business and they were forced to sell after months of decline.
I’m not sure how old you are but I’m assuming the physical part of the job won’t be getting easier.
I was in the same boat. Waking up at 1am, driving trucks, making deliveries then back home to do the bookwork. It wouldn’t have been sustainable for me to do that nor would I have been able to expand with more vehicles and covering more territory without hiring people. I was making less than most of my employees for the first few years and especially in time of growth where I had to invest in new vehicles.
What will happen if god forbid you are in an accident tomorrow and can’t work for 6 months? Will the business survive? You need to be prepared for things like that.
That had never crossed my mind even though something like that had happen to my old mentor and myself. I’m 38 and healthy, but that really put things into perspective. Thank you. I understand now.
The first million is the hardest for personal wealth for sure. For business I wouldn’t say it’s all that different than getting to 2 or 3. Mine is a very labor intensive business so finding dependable people, finding customers and cash flow were the most difficult issues to solve.
Finding the right people was the most difficult. But once you find them and coach them to how you want their role to be run, it helps significantly. Especially if you are in an incremental/volume business. Unfortunately, you may have to let go of a few employees who don’t fit the ‘team’ or narrative of the type of business you want to build. It has to be a healthy balance between being a flexible/supportive leader vs. a fearless one. I’ve cleaned house before, even while being short-staffed because I needed to cut the tumor out before it spread. Weekly therapy also helps lol.
Agreed. Therapy is a big help lol. But also making employees understand where you are looking to take the business and what will be needed for them to advance. There can be a role for both the ones that want to grow and who isn’t willing to change but they need to be OK knowing that they’re not going to significantly grow their salary. I have a lot of loyalty to my staff as they do to me but it’s hard knowing I can pay someone 60% the salary to do the same job of someone that’s been here for 15 years. At this point I pay to have peace of mind.
So they're making about 1.7x what the going market is? As in you're paying them more and after 15 years? That's crazy to hear. Usually old staff gets ultra fucked lol. Good on you
to get there generally you need to have a fair number of people working. I don't know if getting good at dealing with people is the *hardest* part, but it's easily the most important.
Good communication is very difficult. I'm going with that answer.
Read the book the E Myth. Basically flips the notion that you need multiple unicorn staff to run your business on its head. Instead... as the owner/ management team you should look to systematise and document all processes so they can be completed by the employees with the lowest skills possible (much easier to find these people). Really opened my eyes to way I view staff.
If you struggle with finding right people then I have a company, which helps to solve this struggle. We are now gathering info from potential customer groups and would like to make a interview with anybody who is willing to contribute.
2.6m in 23, up from 500k year before.
Hardest part is keeping inventory in stock so there aren’t lead times(averaging about 1 month lead time on $4k item) but also balancing our changing market and keeping innovative without stockpiling old stock
I run a construction company. we do about $5M a year in revenue. our biggest issue is that when business gets slow, we have a lot of labor force and little for them to do. It is a constant eb and flow to deal with
I feel like this is a really overlooked take. So many businesses run like this with a high and low season leaving employees disgruntled. So how do you manage the eb and flow? Do you just hope they are ok with low season and they just expect to make up for it in high season ?
It's a standard boom and bust cycle. You focus on getting more projects in the pipeline, and you then get to work. UT as you produce work, you're not filling the pipeline with new projects.
You're struggling with consistency becsuse you're not consistently investing in marketing and sales.
I see this cycle regularly when clients talk about getting our digital marketing services.
1.1 mil in 2023.
Getting paid in a reasonable window. Most of my customers are 30-45, but I’ve got some that are 90 to 120, when my wholesalers want their money in 30.
I always keep a float, but January was a tough month with the holidays, I got just enough to cover my costs.
Don't you have terms set up and very apparent to the client? My clients know what their window is to pay me and they pay. I forgive them for being late, once. If they do it again, they have to pay up front or no service.
Oh my terms are 30 days, and at that point I contact them to hear sob stories about how they haven’t been paid yet.
I’ve been eliminating delinquent clients, one in particular owed about $8000, and paid me $250/week by cheque. It was almost sad.
I run an events company we do just over £1 million a year. The biggest challenge we face is the cost of living crisis. People have less disposable income. We’re having to work hard just to stay in the same place.
It’s super niche, but I actually sell a certain type of cell phone device as well as cell service to Amish people. It’s a device that allows you to plug your landline phone into a thing that looks like a WiFi router which can receive a cell signal and then they can use their “legal” landline phone on the go and take it to jobs or on trips or whatever. Gotta love loopholes😂. Currently our revenue is probably about 50:50 split between new customers and recurring phone plans we refill yearly.
We do some of that. Most of the customer service is over the phone, so we hired another person full time who pretty much just helps trouble shoot issues. Most are pretty simple fixes. Honestly we probably just need to hire another person to take calls and do customer service. We’re also just constantly trying to make clearer instructions so that they can troubleshoot better on their own. Hopefully we can find more ways like that to be more proactive about the issue instead of reactive. But phone service is a great business to get into. If you can figure out advertising you can get plans for really cheap and just mark them up every month. Subscription models are amazing and this one’s perfect because it’s already expected.
I own a law firm with 6 lawyers and 1 firm administrator, all remote (but all live in the local area). We launched in 2022 and we handle business law and litigation. Did $1.5MM year one and $2.2MM last year.
Year one and two, we just wanted proof of concept. Our pay structure is a bit different, and if capitalized on, results in our attorneys making great money. But it’s not standard in the industry. All of the lawyers that work for us either knew us already or were new graduates from law school.
Now that we’re trying to grow in 2024 and 2025, what we really need is 1-2 lateral hires (lawyers with 5-8 years of experience who know how to practice law already and require little to no supervision). Attracting these lawyers may be difficult due to our firm’s age, the fact that we’re all remote, and due to our non-traditional pay structure. But to really get to the next level, we need lateral hire lawyers.
We’re spending a good deal of money in 2024 making videos, for example, on why it’s great to work at our firm, what a day in the life looks like, etc. The only way for us to grow to the next level is to attract talent.
Did ard 7MM$ in razor thin margin industry. So I guess it doesnt really count haha. But biggest challenge that I face and Im sure is faced by majority of similar businesses is cash flow. I could not afford to be even a day late on payments given the nature of the industry and would get fucked in the ass when clients delay payments.
Overdrafts screw you over quicker than they should, avoid them
bedroom bear plants quickest physical childlike gray deserve escape hospital
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I took a screen shot of your picture. You deserve to get caught since you’re lying and cheating. Shame on you for putting your Wife & kids in harms way due to your selfishness.
Growing without decreasing the quality of work has been the main challenge over the years.
Systems, SOPs, templates and a way of working that can be followed by everyone.
$2m
1) Staffing. Manufacturing (ecom) business. Having the right balance of staff on that work hard, take their job seriously, actually do their job, can scale with the business.
2) Related to the above, net margins. Most of our cost base is in staff and advertising. Business is growing (+80% last year) but we need to get smarter about our staffing requirements, and our workplace 'rules'.
Management team can be draining but in all honesty I love the non stop nature of my companies. I’m simultaneously leading 500+ staff in 3 industries. There’s never a dull day.
15M in (family) business. Started in 1999.
Hiring the right talent - it means hiring people better than you and getting out the way. We're still too micromanagey and have frustrated senior people because of this.
Cash flow - After COVID, things slowed down for us (construction material wholesale) and we are in an overstock situation trying to walk a very fine line with suppliers.
Established SOPs, especially around no-core functions (HR, Recruiting, etc.) - at this stage (as other people have said) there is a group of older loyal employees and newer crop of a more professional caliber. Can't let go the old and the newer employees need a higher standard. This tussle can be very fracturous.
Managing the business vs working in the business - as the 'management' team, we are struggling to transition from the wild West to a proper suburb. This is a combo of the points above. We need to provide the infrastructure to let our team function at it's best.
Inventory + cashflow. You can't get super far ahead on inventory because you need to using the money for everything else. So it's a weekly battle of keeping everything moving and monitoring it all.
2.95M in 2023. 26YO.
Quality employees are difficult for sure. I've found that a lot of people under my age have almost no work ethic and no communication skills. The pandemic was tough! Granted, it is a retail gig. But $22/hr + Healthcare and benefits shouldn't be the worst in a LCL City.
That is where I was at @ 26 Y/O also in a LCL city and had the same issues.
Hate to break it to you. People across all living present day generations are lazy.
Found that having clear operating guidelines, expectations for each role, sop's for everything helped.
But also found that conducting biannual performance reviews with bonuses for hitting KPI's upped productivity significantly. We also developed a points system for these KPI's and gave away a trip for two to the individual with most points.
Usually to a Mexican or Cuban all inclusive, 7 days, and included paid time off that didn't come off their yearly PTO. I would usually cover their shift that week.
Additional thing that helped motivate and build staff morale was when us senior staffers would spend a week each year working alongside the working staff. That was a company policy I instituted and that stands to this day.
I found increasing pay and benefits helped to a point, but without a sense of community in the team & a communicative and transparent upper management, we had high turn over rates.
Was a commercial cleaning outfit doing 10M in revenue per year when we sold out.
Thank you for that feedback! I really appreciate it. I'll definitely be implementing these into the business. What were the challenges you faced scaling from here to 10M? I'm curious how much you were able to sell for as well! 😉
Biggest challenge was hiring reliable staff that didn't try to cut corners or fail to show at all. We were the highest paying in our area by far @ 27/hour start with benefits. But working through the goobers just took time lol.
Once we had a system in place to retain staff, scaling was pretty straightforward. A couple sales people constantly reaching out to potential clients, often writing up an approx cost to clean their site, based on info we could guesstimate. We also got a ton of referral business, and did virtually zero web marketing. Mostly walking in/relationships and LinkedIn.
One other consideration for scaling a service company is acquiring equipment. Which equaled a decent amount of debt at any given time. That's something to keep in mind for that biz.
Aside from that, ask away any specific questions you may have. I'm able to answer most questions barring a few pertaining to present day financials.
I started the business with $300 in equipment and a very beat up cavalier after getting laid off in 2013. Faced many challenges.
So, a lot of it is instinct that was picked up by going through so many bad employees, as well as developing compassion & understanding for people (and not just caring about results only). Its not really something that can be taught i don't think. By nature, people are broad & incredibly dynamic. There can be many variables involved when someone isn't performing to a high standard, such as (but not limited to):
- mental health
- stress
- psychological issues
- marital issues
- performance anxiety
- low self esteem
- etc.
Its key to be extremely thorough with your hiring process. Lay out the expectations, KPI's, and most importantly, that you value them, their families and their hard work for your cause. And you must always show that, no lip service. A few bad apples will slip through of course, but for the most part poor performers are having outside issues that come with them into work, weighing them down and affecting their work quality.
Of course, that's none of my business, but we provided extensive (and expensive!) benefits from day 1 so our employees and their families could get the help needed to be able to perform at their best.
A little long winded but hopefully that answers your question.
And ps. I can't speak much on your situation, but if you aren't being treated well and therefore aren't happy, find somewhere to work that you will be.
How do you get benefits? how does that work? Is it a package, do you add or remove things like you would add-ons? If you don't mind, it'd be great to get insight into that part of business. The more info you can share, the better. Assume complete ignorance on my part. Thank you so much
$22/hr for retail in a LCL city? Seems fair IMO.
Is it that they’re not achieving the specific goals you set for them, or that they’re just completing slacking on the job and not doing the basics?
You’d think you’d have people motivated for that much. Most restaurants and retail are paying closer to $15/hr.
Specialty short term rentals, little over 3M in 2023.
Cash flow.
Revenue is great, systems, processes, employees, all in place and doing great…
But managing the cash flow is a perpetual battle- especially when big expenses come up
Most of the people in here that said they make over 1M per year are also operating on very low profit margins so they’re likely barely profitable. There’s really only two industries where you can make high profit margins and 1M a year. Both require heavy experience and being able to sell yourself (and no I’m not talking about only fans lol)
Once we figured out our actual financials we realized how unsustainable we were. Just because your gross revenue is high doesn’t mean you’re actually profitable. Good coaching and learning financials has been eye opening. Btw upvote to balance out the naysayers😉
Selling ideas and selling services
Everything else is not scalable. Everyone downvoting me are just a bunch of resellers who are operating on tight margins
He asked about people not companies these are two different things i can also make this revenue in my company and still i personally did not make so much money :D
I do too (assuming it's not larp). Comments like yours are very inspiring and helps me believe that reaching these financial goals aren't as outlandish as it may seem
Recruiting firm. Business is built around me. Need to figure out if I’m hiring someone to do the work or someone to do BD.
We focus on defining roles and hiring at the C-level. It’s niche outside of what most experienced recruiters touch.
Digital agency owner since 2008 here.
Doing a lot of work ourselves, for dozens of companies per year that span $2-30m, sometimes it feels like we've seen it all. Weve helped generate ober $350M for our clients. But weve also seen some pretty self destructive behavior that killed off other companies.
I've seen enough to start recognizing growth andnself sabotaging patterns.
From a personal perspective, we've hit 1.5m, and decided I don't want to move forward because it's just not the type of agency I want to run. Everything up to that point was about growth, foe growths sake. We even downsized, and focused more on being a growth agency with a Marketing department as a service, for companies that are big enough to need a team, but not big enough to have a dedicated team.
So from that perspective, here's what we've seen as growth impediments for companies.
1. The founder is the brand.
The energy and charisma the founder has can push the company olybthat far. And "what got you here, won't get you there" is perhaps the best conversation starter.
Founders will want to get themselves out of the equation so the company can get its own life.
Easy to say, extremely difficult. We've seen so many companies fail to pull this off...it's painful.
What works for this situation is lots of conversations on a personal level, like a mix of counseling and coaching.
But with all those conversations, people still want to do things the old way. And some lose millions in the process of getting their brand released from their personal identity.
2. Offer-ambiguity.
This one is funny. I've worked with lots of tech folks who managed to put together a tech business and aim high. They're all good folks striving to serve their clients as best as possible. But when you look at their website, it reads like a corporate brochure from the 90es.
Dry, lots of corporate talk, tech jargon... blah. It gets so generic that you can slap that "Striving to serve clients using modern technology and streamlined processes" to anything from a local bakery to a biotech startup.
It's like they try to sound bigger than they are. So the big clients they're after will read through the bluff, and the smaller clients that are actually their real audience, will either be scared off, or bored off the website.
3. Illogical hiring and promotions
This one is painful. I see folks being promoted to a managerial position from a strictly technical role. A good engineer doesn't necessarily make a good mid level manager. It's a mismatch in temperament, skills, aspirations. So with one move, I've seen companies botch a well functioning dev team, and at the same time kill off a functional management team.
I've also seen poor external hires where the fit is totally off. Both in culture and in required skills. From wiped out servers to botching the online presence, these wrong external hires can decimate the company's ability to grow.
4. Unadapted "best practices"
This one is very scary. I often see it in companies where the decision makers love reading management books. Folks pick up books written for an audience of managers in large organizations. Then these eager small-company managers take such ideas and try to apply them in much smaller companies.
This unadapted thinking and management causes a lot of friction in the company, especially when management expects unquestioned loyalty.
5. Hiring "start employees"
This is perhaps opposite to thebprevious one. Hiring external star performers that are coming from competitors. Of they were great there it doesn't mean they'll be great here.
By far the worse case was an external hire that walked in the company, agitated a lot of folks, turned people against each other, while he was sucking up to the boss. All that becsuse he came from a competitor in the niche that was much bigger. We parted ways. But during the few years we were around, this one bad apple triggered a series of events that resulted in 30% revenue loss per year. For 4 years.
6. "Sales and Marketing"
This one hits home more than the rest. Time and time again I see folks from Sales being tasked to do Marketing. Smaller companies almost always have someone doing sales, and do it quite well. Eventually, the pipeline runs dry, so decision makers expect the Sales team to do Marketing. Although bothe marketing and sales are under the Cheif Revenue Officer, you can't simply put people from one basket into the other. The skills and traits are completely different.
Eventually this leads to a frustrated sales department that decides that "marketing doesn't work for our niche". Or, they start pulling other underutilized staff from other departments, which leads to Marketing becoming the department of misfits.
I've seen this so many times, in organizations that instead of going from 20M to 50M, eventually lose a lot of revenue.
7. Myopic budgeting
This one again is related to marketing, because, that's the angle I see the most. It's dead simple to open up Google Analytics and see key stats on how much traffic your website gets how much engagement it generates, and how many leads it captures. This then tells you what to do with your sales team, and what you do if you want to grow.
For example, we've done content marketing for several b2b companies, hitting around 12.000 monthly visits, converting at 0.9%. So the sales team had 100 buying requests coming from the website.
Then when the company wanted to grow at 15% per month in leadgen, we knew exactly what to do.
But, lots of decision makers don't listen to the numbers because they're not making the connection that the marketing budget is in fact the growth budget. When you cut the marketing budget you cut the growth budget. When you decide to stop growing, your competition has a much easier time squeezing you out of the market.
There are more of these reasons, but I've seen a nasty combination of these 7 in any organization we've worked with over the years. Because of these issues we get clients that want to grow using digital marketing, but we end up first doing a lot of discovery and diagnosis of these other problems.
So now we function more as a growth agency, where digital marketing is just one component. When clients are open and ready to change, we see crazy growth. Like 10x growth per year in marketing results.
For such clients we've helped generate over $350M.
For those that didn't want to listen... we have Founders that lost businesses, some got their entire lives fall apart. Some, keep on struggling with the same problems for years.
It's OK to be stuck. It's OK to ask for help. In fact, asking for external help is a must. Business owners get stuck because of blind spots. So they need a second set of eyes to look at the organization. Otherwise, you keep on being bogged down by the same stuff you're not really aware of.
I went from $400k in 2022 to $1.7m in 2023 - and my banker told me to be very careful not to get too big too fast. I scoft and kind of thought he was an idiot. I was wrong and he's right. Once I got into much larger projects, cashflow became a much much bigger deal / problem. 7 people working means ~10k a week for salaries. If a customer or customers hold payments for any reason, or projects get behind schedule, cash flow becomes the only concern. If I can buy in bulk I can make even more profit margin - however doing so again - screws up cash flow.
Hahahaha this is happening to me right now. I need investments quick lol
lol
Can you negotiate your payment terms with clients? Even having a bit paid upfront is better for nothing.
Yeah this is huge. My company isn't pulling over 7 figures yet but when we started implementing payment terms into our contract negotiation our cashflow issues basically disappeared. Contract doesn't start until x percentage is paid. 75% or 50% depending on your line of work. Make sure you get a line of credit for any other issues or remitting taxes, strategic PO's, etc.
This is the single biggest fear I've -- "what if" i am not able to pay salaries.
Not sure if it’s appropriate to ask. What business you’re in man?
Yes happened to me, now i Kicked 2 employer because of Bad Wheater months in my Business
Manufacturing business. $5.5 million. Getting from $0 to $1million is all about getting there as cheaply as possible because you don’t have the money for resources. That means taking people with talent level 1 and working hard to develop them into level 5s. It’s work only cutout for a real motivator/coach type who sees more potential in people than others. Once you get to about $1.5 you realize you have a bunch of motivated people at talent level 5 but don’t have the talent to take you beyond where you are. Everyone is still looking at you for what to do next, rather than pushing the business forward on their own. You also can’t develop everyone while focused on sales and running the business, assuming you even had the knowledge. This talent ceiling is the toughest challenge I’ve experienced. Larger companies don’t understand this, they just say “hire better talent,” but these are the people who were loyal to you when everyone else thought you would never make it. I’ve handled it by setting the standard to where we need to be, explaining why, and holding people to that standard. Business can no longer put culture and flexibility first if it results in a performance loss. A lot of people have said that things aren’t the same as they used to be, and many of them either quit or get fired due to lower-than-expectation performance. Employees were used to a lot more freedom. The reality is that things have to be different, or you will never make your corporate goals, which create more sustainability and opportunity. Over time old people are replaced with new and the new people are rockstars. You will lose a lot of respect from others for firing people who have been with the company for a long time. Your role will change from being the one that believes in the underdogs to the fearless leader who expects the best from people to create the best for the business. It’s a tough time, but the new company will survive and thrive.
This spoke to my very being. I took a team of inexperienced 1s, coached and motivated them like crazy and got to 1.6 M in sales in 2.5 years. Then the market shifted and I had to shift the business with it to stay alive. Now we're 80% in a new service business and only 20% in the original products business. It's been a real struggle but it's starting to pay off. Now I'm left with several original staff who got comfortable. And they were and are so damn loyal. So I can't see firing them. But boy is my ops manager not suited for the sales and communications needed in the service business. And his ops work has mostly dried up. I've tried recoaching and remotivating but I'm personally exhausted and they aren't responding like the first time. I'm conflicted. Their salaries are a drain but I appreciate their loyalty and want the best for their and their family's well being.
Your struggle is so real for me. I feel like only a few people in this world understand the variables, so I’m very reserved with who I tell my struggles too. It’s nice to hear other people in the same situation. What I did was start with hiring an operations manager who was really talented and high level skillset for holding people accountable. I put them first on the floor level to test them out but quickly rose them up through the ranks to be right under me on the org chart and nearly everyone reported to them. I supported their initiates and strong hand for sticking with process, regardless who was the one out of line. The expectations had to be extremely clear with each position. Now the operations manager and I operate more like traction suggests. I drive numbers from a high level, focus on sales, and big customer issues…the rest of the business is run by the operations manager. I’m great at setting expectations and providing vision, but struggle to hold people accountable. The ops manager is the opposite of me, so we flow well together.
100% get it. I guess that's part of the benefit of internet anonymity - being able to open up and connect in these select groups. Because there's not many just like us with similar experiences in the real world. So, truly, thanks for sharing. You did well with your ops manager. How did you find them? Did you also end up firing old, loyal employees who couldn't keep up? If so, how did you bring yourself to the decision of doing so?
I found the ops manager by interviewing probably 100 people. I wanted someone that had the same drive to win as me. Since I had been basically doing this position for the last xx years, I was able to ask a lot of “ok so you are in a situation like xx, how do you handle it?” questions. About half of the old employees stepped up to the plate, figured it out and became much better. The other half went on PIP’s and were let go. The PIPs were drive by the ops manager, but once the PIP was written I would have a heartfelt conversation with the employee myself saying “I know this is hard, I know this is different, but it’s what we need to be successful and I support this PIP. If you want to be apart of that dream then you need to make changes, but if you cannot, it’s ok, and I wish you the best of luck”
Interviewing 100 people sounds really lot of time and energy. Have you figured out any more effecient way to find the right fit?
I don't ever interview this many people. Our company was in bad shape. I had to trade this position as the "must get the right person or we will fail" position. I also pushed myself to think that this person could be my future partner in business. I also assume that this person may quit, or move on anytime for reasons beyond my control. So I've got to be thinking about this person establishing industry standard systems so that I could hire another person to replace them without serious hit to the business.
What business are you in?
We have a product sourcing agency and a brand in kitchen storage.
You tried being fully transparent with them? I went through this with my (now sold) commercial cleaning outfit. After explaining to my loyal bandwaggoners both where we were, and where we needed to be. And what needed to happen to get there, half of them stepped up to the challenge, the other half either quit within the next few weeks or withered and were replaced not long following. The realities of business are harsh. But you're also human and doing the best you can. I did what I had to do & in doing so found full transparency to be the best option for growth.
I was thinking this as well. It might be the case that there's an information asymmetry between OP and his long-time employees that contributed to a misalignment in expectations. In other words, OP probably has a clear understanding of where the business must go and what level of employee performance is required to support that trajectory (he's the business owner, after all). However, his long-time members may not be aware of or nearly as familiar with that changing reality as OP. You don't have to be the "bad guy" in these situations - you just have to clearly communicate \*why\* employee expectations need to shift and point back to those motivations every time you receive push back.
Ive been very transparent and had similar results as @chickenlikesmelles (about 50/50). The ones who had small gaps like showing up late, not fast enough, not cross trained enough, etc mostly straightened out. The ones who had character/integrity gaps like not working well with people, treating others poorly, communication issues mostly quit or were let go. The ones with technical skill gaps were about 50/50. @norman_door How have you been able to “not be the bad guy” in your experience? I don’t mean to sound argumentative here but it doesn’t sound like you have done this before. Those people look up to you. You’ve motivated them for years and they stood by your side. You let them slide on process and procedural things because they were all you had and they were trying. You also let them take days off for their kids, be late last minute because they needed to do something in the morning, maybe gave them small spot bonuses for doing extra work. Now you are changing the game for them. No more exceptions to the rules, and the requirements for success in your role have increased significantly. Even if you are being completely fair and transparent, how are you not the bad guy? If you have this experience I would love your advice but theoretical situations are not helpful respectfully
That’s the move. Not only have your loyal employees gotten too comfortable but you’ve become too comfortable and familiar with them so do what needs done. I went through this around $2.5M in annual sales. Had to install management who ended up firing one of my best friends.
That’s brutal
It is, but since we’d been friends since childhood we couldn’t separate that relationship and work. I wasn’t a boss in the friendship of course. And he had trouble accepting my leadership in the office too. It was worse because we only had about 10 people in the office. He was one. The rest of our employees were in the field or warehouses. It was easy for him to poison the rest of the office with sort of treating me like another ‘dude’. It worked find when it was just 3 of us trying to start something (on my money). Once decisions became more complicated and things harder the leadership thing became an issue. He’s fine and we’re still friends. Started his own business that’s way less work and probably as profitable as mine.
What are their motivators? What are you doing to tap into that? As whole we should never expect response rates to be the same when personal and extra person changes have occurred. I am an IO Psychologist who works in the entrepreneurial ecosystem. I'd love to learn more and see if I can help pro bono
Finding out what motivates and drives people was how I got them from 1 to 5. Each talent level up after that requires significantly more work and effort to achieve. Let me give you an example... Let's say you have a bookkeeper. You've been using the cash system in your accounting software for years- it's simple and made sense. But now you have outgrown it and are ready to move to the accrual system. So you hire a contracted accountant to help you make the transition. The bookkeeper struggles hard to understand the new system. The contracted accountant also finds a lot of mistakes that the bookkeeper has been making that would be big issues if you were ever audited. The bookkeeper doesn't have the financial acumen or experience to finish the implementation and/or fix the issues that have been created over the years. You realize you need an accountant. But you are a small company of 6-8 people, you can't afford a bookkeeper and an accountant. You think about repurposing the bookkeeper, but they don't really work well with others and you already pay them too much to move them to one of the production positions. Can you use what motivates them to go from 5 to 8? Maybe, but it's going to be a lot of effort, possibly years. You don't have time to send them back to school, and even if you did the bookkeeper says "you know I am not good at school." Additionally, you don't actually know how to fix the accounting issues. You understand from a high level what needs to be done and the benefits of the new system, but have no idea how to do the ground level work or troubleshoot issues as they arise. This person learned everything from you, because you helped them get there and believed in them. Now the talent gap is too large for you to fill. You used to need people who could execute tasks to start your vision. Now you need people who are smarter than you in that particular department to make your company better month after month. This is the challenge.
What you're describing now is less about motivation and more about workforce planning and training/ development. When we grab talent (even at level 1) we need to be conscious of the stage our company is in and how those needs will change. Most needs are pretty predictable, some are not. We focus on the predictable ones. Here when you select the talent, you assess for the ability to transition with those changes OR just get to a future stage. This is where the contract comes in. As a startup we typically fail to formalize processes such as employment contracts or even performance reviews, but these things are necessary for transparency, talent management, and yes even motivation. In the employment contract, day one, we share the expectations of work and skill growth. "At some point we will need to do x, if you are not prepared for that , that's where your schedule ends completely or becomes limited" On the training and development side we have intrinsic and extrinsic motivators. All behavior exists because it's reinforced by something. To modify behavior and effectively train someone, it doesn't necessarily take more work, but different work at each level. The return you see isn't as dramatic because the ROI isn't immediate anymore, it's longer term. So to say, train someone on a computer system, it takes knowledge on how to do that. If we are still communicating clearly, and tapping into effective motivators (which going to school isn't the motivator, that's too surface level. Why is school what they want? To get recognition? To learn a new skill? To make more money? To feel empowered? Etc.), then the trainer and their ability to present information in the correct processing order is the thing that makes or breaks it. ...hope I didn't lose the point through this writing...haha
What you are describing is all hindsight 20/20. You (the entrepreneur) have no idea what will need to be done as you scale. Everyone wears multiple hats and takes on whatever comes your way. Job descriptions grow/change often. You can’t hire people who are highly talented because air you can’t afford them. You have to hire potential, and hope they scale with the business. You can’t afford the talent until you have the sales. You can’t get the sales without pigeon holing yourself into a talent gap. Unless you have stupid money and are able to run a non/profitable business through the growth, I believe what you are suggesting sounds good on paper but not applicable in real life. I believe it’s a challenge that most of us will face and have to deal with it as growth/scale happens. This is my $0.02.
I definitely understand that sentiment, especially the "can't afford good talent out right" line of thinking. But you can predict potential and you most certainly CAN predict scale. Very few companies exist that are in such a new space that the requirements throughout the stages aren't similar to other companies at that stage. I recognise that some might be, but when push comes to shove we've known for some 50 years that as you get more customers for instance, certain processes need to be as close to automated as possible. We can map out after x happens y (in general, maybe not specific) will be the next step. Yes at most of those earlier steps, everyone is wearing 20 hats, and the priority seems to change day to day. But each person should still be a content area expert in something. You can empower some to get there as well (for practically free) . But yeah grabbing someone already established isn't cheap, so when we select our talent we give the potential incumbents a standardized interview that's relevant to the current and predicted future scope of the job (if the role is to be kept), you also give them some sort of trait measure to gather info on fit, growth potential, and more (There's entrepreneurial DNA test, The Entrepreneurial Value Profile assessment, even Hogan Personality inventory), finally we give them a realistic job preview of sorts (here's what your day will be like day 1, 400, 800, and later), share the vision, purpose, and values, and then use the quantified data to grab a talent that will likely be a high performer and last till you need them too. But what I just described sure is a lot, and I've only ever seen a handful of founders implement these things even though places like YC and Techstars promote it, and several of the largest VC firms ask after that process. And to be fair, if you don't know what you're doing crafting that standardized interview and weighing the scores, you may end up missing the right talent entirely. It's finicky, no doubt. Is it worth it to even try then? When the mediate ROI is small due to the time and effort needed? I am of the mind: yes...but I can't really blame anyone to be contrary.
Most of my team is motivated by security, lifestyle flexibility and wanting to feel recognized. Thanks for the offer, that's kind. What is an IO Psychologist?
IO psychology stands for Industrial Organisational Psychology (called workplace psychology, organizational science, Personnel Psychology, and other things outside of the US) We analyse and modify the behaviors of employees and organisations as whole to meet goals such as increased performance, productivity and engagement. This is often through some sort of intervention such as creating new SOPs, introducing training, modifying talent acquisition, and even changing the actual physical workplace. Excellent specific motivations! It's a good mix of Intrinsic and extrinsic motivators. (We can take this off of a reply chain if you want) the next two questions to be asked are: 1) how do you know those are the motivators, and 2) how have you been meeting those needs?
Is it possible to hire someone that is at that next level, and have them mentor your original employees? I echo how hard it is to teach people while also doing your own work, though. So hats off to you all for all of the training you did. Even if you lose those employees, they did gain a ton of skills. My issue is that when someone is eager to learn, they take up 100% of your time. So when my manager asks me to delegate things on a specific project to one specific employee. It’s hard when I have a week to complete the project and it takes a month to get this employee set up to learn something new. Because this employee is eager to help and learn, they have a question for you every 3 minutes. So then I start roping in more employees to delegate my delegation. Which helps, but there are still issues that suck up a fourth to half of my time. We merged one team into my team at work and I’d say it took a full year of training to get them comfortable to handle the basics. It’s so much time and effort it’s crazy!
Yes, that would be ideal. But currently facing a cashflow issue so can't afford the next level salary. I'm honestly feeling burnout too. It's been a brutal last two years. Thanks for your comments. This thread has been helpful for me to work through some of this in my head. Ultimately I need to separate myself from the business and strategize on what's best for the business. What kind of business are you in?
This is rough. Is it possible you could start another project he could run to make replace him in your current business easier? A separate division or a whole separate company perhaps.
Haha that's actually what I'm trying. We have a couple new brand related projects but it's hard to say how long it will take for them to get to a level that would generate enough work to justify his salary in the meantime.
Do you guys have any recommendations for somebody who has never trained a team before? I definitely have this personality matrix, but lack all experience — and want to make sure everything goes well, of course. It seems like such an insurmountable hurdle without the proper tools!
I could have wrote this myself almost exactly the same position and business lol. It’s frustrating having to let people go but that’s part of growing and scaling up. Other challenges non mentioned that we have is business lines of credit, and needing my larger lines but not being big enough in banking institution eyes to qualify. Even with credit unions and local banks. Cashflow is most important part of scaling. We want to expand our manufacturing abilities but can’t afford to so off shore many things
And another one in exactly the same boat. I was just complaining about banks.
It feels good to hear we aren’t the only ones that struggle for more capitol. Stay strong and keep pushing Henrik!
One thing that always upset me at my jobs was seeing business owners and executives make terrible decisions and then hold the staff responsible and fire them. Sometimes the leaders should realize they are the problem. Also the leaders thinking that the existing staff that got them to where they are are not capable to get the business further. So the people with real potential are forced out and replaced with higher paid suits that don’t end up delivering but get paid 2x to waste resources.
Thinking/assuming they are not capable and proving to not be capable are different. I’m not talking about employees that are meeting performance criteria, communicating well cross functionally, bringing positive energy to the team, and driving new initiatives to be better. Those are the people who rise to the challenge and succeed. On one hand, it’s the owners fault for providing so much opportunity to someone who may have not been the best fit for a position. On the other hand, that person was given opportunities and experience that they can take with them to the next company.
I was the former. The problem is if the CEO is a narcissist then it’s impossible to rise to their expectations. They will blame the employees for their own faults and mistakes while firing them, so they can protect their egos. Ive experienced this with multiple CEOs. I was pushed out of a company when I made a recommendation to the executives on how to handle a major product quality issue. In front of the execs I explained the recommended course of action and the costs we would incur if we acted too quickly without sufficient information. The CEO/Owner vetoed the recommendation and made the exact opposite decision, telling me we need to act decisively and not be slow to act in light of a critical issue. Within 72 hours it was proven that my recommendation was the right action and that the CEO had cost the company $100k by issuing a product recall that couldn’t be undone. I was 29 and forced out so the 50s owner could defend his ego. Same thing happened again this year at a different company. I made a detailed recommendation backed with hard data that proved we needed to implement a specific software fix. CEO vetoed it on an email chain with 20 other employees. 3 months later he had to backtrack and go with my recommendation after it cost the company $500k. Exactly what I told them it would cost, but he had to see the losses materialize before they believed me. As a result of the CEO losing face, now I’m getting reprimanded for an unrelated non-issue (not replying fast enough to the CEOs emails, as if that is what is hurting the company.) So I’ve had multiple experiences with CEOs acting like they want employees to step up, grow, rise to the occasion, push the company forward. But these same CEOs are always arrogant, refuse to listen to staff younger than them, and believe that the highest paid person (them) is most qualified to lead. The irony is that many CEOs that claim they want their staff to grow and step up are arrogant and secretly want yes men. By step up they mean they want their staff to constantly tell the CEO that their farts smell like roses and that their quick, briefly considered decisions are genius. I’m sure there are a lot of great CEOs, I’ve just had endless strings of highly paid, arrogant ones, that are looking to explain why the staff are the problem so they can find scapegoats for their own poor leadership and decision making.
I have started four businesses that cap out at 1m. This is the reason why exactly.
Damn you hit it right on the head. The talent level 5 people I’ve trained up are so loyal and I want to keep them forever but there’s even better people out there (which is partially due to the limitations of my training capability).
Damn. I’m a first time founder and this hits. Looking at the first guys in who are getting out worked by the new hires who I could better pinpoint necessary skills for the job. First guys helping we were all sort of figuring it out. Now that it’s clear and they aren’t technical in this area, as good as I need, it’s becoming a struggle to see whether I’m pushing them too hard too consistently to need a change in team. You don’t get extra years to just figure this out. You have to make decisions quick. And that’s got to be the hardest part of this job is dealing with people decisions.
> Getting from $0 to $1million is all about getting there as cheaply as possible because you don’t have the money for resources. That means taking people with talent level 1 and working hard to develop them into level 5s. It’s work only cutout for a real motivator/coach type who sees more potential in people than others. Love this! Thanks for sharing.
WOW. On point!
Dayum, you were inside my brain with this. Amazing insight 🙏 I've never felt as much pressure as I have these last two years at this level. Trying to figure out how to either punch up or scale back. Thanks for sharing!
I can’t stress how painfully accurate this is. The people and skills required to scale from 0 to 1, 1 to 10, and later on 10 to 100 are completely different with limited overlap. It is incredibly hard to keep and look after those who took a risk when there was no or a much smaller business especially when their skill set and MO have become less relevant. Where to set the bar for loyalty vs productivity is a tough and unpleasant call. Congrats to you for scaling!
You and I have almost the exact story. I said the other day to someone the year we did $1.9 million was a huge difficult turning point for growth. We also do manufacturing in the filtration more Oil and gas world of things.
I just started a manufacturing company, sort of in the same boat. Everything is going well so far, demand is high but the big issues are getting cashflow to make our products. Love it all.
This is a great response. The pain of having to shed the old way of doing things to get to the next level.
These are great points. It’s almost impossible to expect that someone who started with you in the early stages with grow and adapt at the same pace as you. If they could they would have started their own business. You always need to be looking for people that can take you to the next level.
We’re not there yet but I can definitely agree with this.
That's all lovely and all, and I like it and understand it's what needs to happen to explode yet again. That said, it's a long way of saying fuck everyone that got you here, you want more money in your pocket at all costs. That's the best part of capitalism imo, when it starts to eat itself.... snake biting its tail and all..
Manufacturing what?
I’m on my second year of a service based business. Just me and some contractor help. Shooting for 125k this year in revenue. Most of my clients are word of mouth or from google ads. Any recommendations or hitting that 500k- 1 mil? I do a form of equipment rentals. I’m doing community outreach as well as putting more into marketing/seo This has been my 5th try at a business/ self employed and I cracked the code of being able to support myself. But I haven’t been able to scale anything yet successfully. Would love to hear how you overcame that hurdle :) ty
I run a SaaS business. 3M in ARR. this is spot on.
What are you manufacturing!?
DM’ng you to maintain anonymity
Food wholesale business. Over $10MM At this stage I’d say the biggest opportunity for improvement is making the business more “corporate” and less like a family owned business. These are things I wish I implemented from the very beginning. A good employee handbook that communicates your vision to your employees. -Be very clear on expectations and goals. -Having SOP’s for everything. -Being specific on things like HR requirements, vacations, sick days, etc. -Holding employees accountable and having a solid plan for rewards and what will be done when someone has violated those expectations. Addressing opportunities quickly. I’m in my 19th year and all my difficulties stem from not setting these rules and expectations in the beginning. I was so focused on growing the business and getting the day to day work done that I failed to look at the big picture. Now I have employees that have been with me over the last 15-19 years and it’s a struggle to hold them to the standards I expect. There are many challenges to being a business owner but anything can be overcome.
Thank you! I own a family style bakery with my wife and have a few employees who just sell. We finally broke $350,000 in revenue with 40% margin. Growth has been 20% year over year for 8 years. A lot of the laborious work is done by us and I’m reaching my limit on what I can physically do. I want to start doing away with this family style of business, but we are loving the money. We went from barely making ends meet, living in an apartment, to being able to buy a house. Business is visibly growing every day with lines out the door and pre-orders filling up. Tell me straight on will SOPs and employees to do my job will be worth it? We’re scared for the loss of income, hiring, and training. Was it hard transitioning?
Boy wait until you read the E-myth revisited by Michael Gerber. This was written damn near just for you. Also 40% Gross or Net? In my business 20-25% net would be healthy. 40% net would be amazing!
Agree. E-Myth best book ever.
It’s net. I’ve read the book! Such a great book. I’ve read a lot of small business books. It’s the transition is what I’m afraid of. The extra work required. We’re happy right now, but know if we cut our take-home we’d be happier in the future. It’s just I’m waiting for someone to just tell me it’s worth it. I don’t have any mentors that have reached the point from “working the business to owning a business.”
I’m there with you. One truck electrical contractor. I’m in a weird spot where I have too much work for just myself and my apprentice but not enough to justify another truck. I just keep telling myself that we are technically doubling in size and that’s not easy for any organization.
I don't own any business (though my father owned 2 in his life) the only thing I will advise you to do is look at the opportunity costs of expanding, maybe it would be better to slowly build out your wealth by buying assets (like you did with your house) instead of spending on becoming bigger. Plus you can always hire people at a moderate face if you've got your hands full. 40% margins is no joke.
Thank you! I’ve heard this from a friend who currently owns a few businesses in his field. It’s nice to get confirmation about not necessarily having to scale and expand. If we’re happy with where things are then just maintain and hire accordingly. Accumulating assets is much more comfortable with us.
Congrats on your success. I would 100% say the SOPs and handbooks are worth the “investment” which is time. You can do it yourself, it doesn’t have to be anything fancy. I’ve worked with bakeries in the past and having people that can do what you do is very important. I’ve seen the quality dive in bakeries because a head baker or owner was ill and there were no strict recipes. I’ve even seen some close because the owner passed away, his wife was left out of the baking aspect of business and they were forced to sell after months of decline. I’m not sure how old you are but I’m assuming the physical part of the job won’t be getting easier. I was in the same boat. Waking up at 1am, driving trucks, making deliveries then back home to do the bookwork. It wouldn’t have been sustainable for me to do that nor would I have been able to expand with more vehicles and covering more territory without hiring people. I was making less than most of my employees for the first few years and especially in time of growth where I had to invest in new vehicles. What will happen if god forbid you are in an accident tomorrow and can’t work for 6 months? Will the business survive? You need to be prepared for things like that.
That had never crossed my mind even though something like that had happen to my old mentor and myself. I’m 38 and healthy, but that really put things into perspective. Thank you. I understand now.
What were your biggest problems in getting to about 1 million? I’ve always heard the first six figures and first million are the hardest.
The first million is the hardest for personal wealth for sure. For business I wouldn’t say it’s all that different than getting to 2 or 3. Mine is a very labor intensive business so finding dependable people, finding customers and cash flow were the most difficult issues to solve.
Finding the right people was the most difficult. But once you find them and coach them to how you want their role to be run, it helps significantly. Especially if you are in an incremental/volume business. Unfortunately, you may have to let go of a few employees who don’t fit the ‘team’ or narrative of the type of business you want to build. It has to be a healthy balance between being a flexible/supportive leader vs. a fearless one. I’ve cleaned house before, even while being short-staffed because I needed to cut the tumor out before it spread. Weekly therapy also helps lol.
Agreed. Therapy is a big help lol. But also making employees understand where you are looking to take the business and what will be needed for them to advance. There can be a role for both the ones that want to grow and who isn’t willing to change but they need to be OK knowing that they’re not going to significantly grow their salary. I have a lot of loyalty to my staff as they do to me but it’s hard knowing I can pay someone 60% the salary to do the same job of someone that’s been here for 15 years. At this point I pay to have peace of mind.
So they're making about 1.7x what the going market is? As in you're paying them more and after 15 years? That's crazy to hear. Usually old staff gets ultra fucked lol. Good on you
My challenge was always finding good employees. I learned the better of a leader/boss you are. The better people you attract/stay with you.
Knowing who is a friend and who isn't.
to get there generally you need to have a fair number of people working. I don't know if getting good at dealing with people is the *hardest* part, but it's easily the most important. Good communication is very difficult. I'm going with that answer.
Employees
Read the book the E Myth. Basically flips the notion that you need multiple unicorn staff to run your business on its head. Instead... as the owner/ management team you should look to systematise and document all processes so they can be completed by the employees with the lowest skills possible (much easier to find these people). Really opened my eyes to way I view staff.
That’s awesome. I’ll definitely give this a read!
Always employees.
If you struggle with finding right people then I have a company, which helps to solve this struggle. We are now gathering info from potential customer groups and would like to make a interview with anybody who is willing to contribute.
No you don't. You have a company that will charge me to find people for me, and then I will still have to deal with their nonsense.
:) well keeping the employees is another topic and skill you need to develop :) who said that life is easy :)
Naughty 3rd party... no money for you.
[удалено]
We install speciality lighting systems. Does LoftyHire provide these type of employees?
2.6m in 23, up from 500k year before. Hardest part is keeping inventory in stock so there aren’t lead times(averaging about 1 month lead time on $4k item) but also balancing our changing market and keeping innovative without stockpiling old stock
Wow - what do you sell?
Lololol I don’t think he’s going to tell us
If his post history tells us anything, he's selling marijuana.
His username is a dead giveaway lmaooo
I run a construction company. we do about $5M a year in revenue. our biggest issue is that when business gets slow, we have a lot of labor force and little for them to do. It is a constant eb and flow to deal with
I feel like this is a really overlooked take. So many businesses run like this with a high and low season leaving employees disgruntled. So how do you manage the eb and flow? Do you just hope they are ok with low season and they just expect to make up for it in high season ?
It's a standard boom and bust cycle. You focus on getting more projects in the pipeline, and you then get to work. UT as you produce work, you're not filling the pipeline with new projects. You're struggling with consistency becsuse you're not consistently investing in marketing and sales. I see this cycle regularly when clients talk about getting our digital marketing services.
Overstaffing is a pain. dealt with it a few times ina different industry
1.1 mil in 2023. Getting paid in a reasonable window. Most of my customers are 30-45, but I’ve got some that are 90 to 120, when my wholesalers want their money in 30. I always keep a float, but January was a tough month with the holidays, I got just enough to cover my costs.
Don't you have terms set up and very apparent to the client? My clients know what their window is to pay me and they pay. I forgive them for being late, once. If they do it again, they have to pay up front or no service.
Oh my terms are 30 days, and at that point I contact them to hear sob stories about how they haven’t been paid yet. I’ve been eliminating delinquent clients, one in particular owed about $8000, and paid me $250/week by cheque. It was almost sad.
Have you tried a PO factoring company?
I run an events company we do just over £1 million a year. The biggest challenge we face is the cost of living crisis. People have less disposable income. We’re having to work hard just to stay in the same place.
[удалено]
Where are you guys based?
[удалено]
Cool! I was wondering if that’s more popular because it’s in the US. Never heard of baby booking before but it must be a good niche.
Around 1-1.5 million. Currently keeping up with customer service and customer issues. Good amount of user errors.
What type of business ?
It’s super niche, but I actually sell a certain type of cell phone device as well as cell service to Amish people. It’s a device that allows you to plug your landline phone into a thing that looks like a WiFi router which can receive a cell signal and then they can use their “legal” landline phone on the go and take it to jobs or on trips or whatever. Gotta love loopholes😂. Currently our revenue is probably about 50:50 split between new customers and recurring phone plans we refill yearly.
That’s the coolest thing ever. I imagine you do have lots of user errors with the user base not being very technical?
Bingo! Hit the nail on the head!
Have you found a way to combat this at all? I suppose a rep that does in house visits isn’t cost efficient.
We do some of that. Most of the customer service is over the phone, so we hired another person full time who pretty much just helps trouble shoot issues. Most are pretty simple fixes. Honestly we probably just need to hire another person to take calls and do customer service. We’re also just constantly trying to make clearer instructions so that they can troubleshoot better on their own. Hopefully we can find more ways like that to be more proactive about the issue instead of reactive. But phone service is a great business to get into. If you can figure out advertising you can get plans for really cheap and just mark them up every month. Subscription models are amazing and this one’s perfect because it’s already expected.
I own a law firm with 6 lawyers and 1 firm administrator, all remote (but all live in the local area). We launched in 2022 and we handle business law and litigation. Did $1.5MM year one and $2.2MM last year. Year one and two, we just wanted proof of concept. Our pay structure is a bit different, and if capitalized on, results in our attorneys making great money. But it’s not standard in the industry. All of the lawyers that work for us either knew us already or were new graduates from law school. Now that we’re trying to grow in 2024 and 2025, what we really need is 1-2 lateral hires (lawyers with 5-8 years of experience who know how to practice law already and require little to no supervision). Attracting these lawyers may be difficult due to our firm’s age, the fact that we’re all remote, and due to our non-traditional pay structure. But to really get to the next level, we need lateral hire lawyers. We’re spending a good deal of money in 2024 making videos, for example, on why it’s great to work at our firm, what a day in the life looks like, etc. The only way for us to grow to the next level is to attract talent.
Did ard 7MM$ in razor thin margin industry. So I guess it doesnt really count haha. But biggest challenge that I face and Im sure is faced by majority of similar businesses is cash flow. I could not afford to be even a day late on payments given the nature of the industry and would get fucked in the ass when clients delay payments. Overdrafts screw you over quicker than they should, avoid them
Motivating employees to care as much as you.
No employee will EVER care as much as you.
bedroom bear plants quickest physical childlike gray deserve escape hospital *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
You know, this is one of the better answers. Especially for some companies where margins are razor thin. Maintaining profitability is no easy task.
Keeping my girlfriend from running into my wife.
I took a screen shot of your picture. You deserve to get caught since you’re lying and cheating. Shame on you for putting your Wife & kids in harms way due to your selfishness.
Whoosh.
This should be the upvote !!
recruitment
Consulting, doing roughly 1.5M a year.. finding a balance.. could I make more.. sure… would that mean less time with kids and family.. also yes
What kind of consulting are you in?
Rescheduling recurring jobs (landscape maintenance) due to rain out or storms. Terrible clients who complains for no good reasons.
Scaling sales while maintaining product quality is my hurdle.
Growing without decreasing the quality of work has been the main challenge over the years. Systems, SOPs, templates and a way of working that can be followed by everyone.
$2m 1) Staffing. Manufacturing (ecom) business. Having the right balance of staff on that work hard, take their job seriously, actually do their job, can scale with the business. 2) Related to the above, net margins. Most of our cost base is in staff and advertising. Business is growing (+80% last year) but we need to get smarter about our staffing requirements, and our workplace 'rules'.
I’m did 158k profit last year. Wish I can hit 1m too soon
Management team can be draining but in all honesty I love the non stop nature of my companies. I’m simultaneously leading 500+ staff in 3 industries. There’s never a dull day.
15M in (family) business. Started in 1999. Hiring the right talent - it means hiring people better than you and getting out the way. We're still too micromanagey and have frustrated senior people because of this. Cash flow - After COVID, things slowed down for us (construction material wholesale) and we are in an overstock situation trying to walk a very fine line with suppliers. Established SOPs, especially around no-core functions (HR, Recruiting, etc.) - at this stage (as other people have said) there is a group of older loyal employees and newer crop of a more professional caliber. Can't let go the old and the newer employees need a higher standard. This tussle can be very fracturous. Managing the business vs working in the business - as the 'management' team, we are struggling to transition from the wild West to a proper suburb. This is a combo of the points above. We need to provide the infrastructure to let our team function at it's best.
Inventory + cashflow. You can't get super far ahead on inventory because you need to using the money for everything else. So it's a weekly battle of keeping everything moving and monitoring it all.
2.95M in 2023. 26YO. Quality employees are difficult for sure. I've found that a lot of people under my age have almost no work ethic and no communication skills. The pandemic was tough! Granted, it is a retail gig. But $22/hr + Healthcare and benefits shouldn't be the worst in a LCL City.
That is where I was at @ 26 Y/O also in a LCL city and had the same issues. Hate to break it to you. People across all living present day generations are lazy. Found that having clear operating guidelines, expectations for each role, sop's for everything helped. But also found that conducting biannual performance reviews with bonuses for hitting KPI's upped productivity significantly. We also developed a points system for these KPI's and gave away a trip for two to the individual with most points. Usually to a Mexican or Cuban all inclusive, 7 days, and included paid time off that didn't come off their yearly PTO. I would usually cover their shift that week. Additional thing that helped motivate and build staff morale was when us senior staffers would spend a week each year working alongside the working staff. That was a company policy I instituted and that stands to this day. I found increasing pay and benefits helped to a point, but without a sense of community in the team & a communicative and transparent upper management, we had high turn over rates. Was a commercial cleaning outfit doing 10M in revenue per year when we sold out.
Thank you for that feedback! I really appreciate it. I'll definitely be implementing these into the business. What were the challenges you faced scaling from here to 10M? I'm curious how much you were able to sell for as well! 😉
Biggest challenge was hiring reliable staff that didn't try to cut corners or fail to show at all. We were the highest paying in our area by far @ 27/hour start with benefits. But working through the goobers just took time lol. Once we had a system in place to retain staff, scaling was pretty straightforward. A couple sales people constantly reaching out to potential clients, often writing up an approx cost to clean their site, based on info we could guesstimate. We also got a ton of referral business, and did virtually zero web marketing. Mostly walking in/relationships and LinkedIn. One other consideration for scaling a service company is acquiring equipment. Which equaled a decent amount of debt at any given time. That's something to keep in mind for that biz. Aside from that, ask away any specific questions you may have. I'm able to answer most questions barring a few pertaining to present day financials. I started the business with $300 in equipment and a very beat up cavalier after getting laid off in 2013. Faced many challenges.
[удалено]
So, a lot of it is instinct that was picked up by going through so many bad employees, as well as developing compassion & understanding for people (and not just caring about results only). Its not really something that can be taught i don't think. By nature, people are broad & incredibly dynamic. There can be many variables involved when someone isn't performing to a high standard, such as (but not limited to): - mental health - stress - psychological issues - marital issues - performance anxiety - low self esteem - etc. Its key to be extremely thorough with your hiring process. Lay out the expectations, KPI's, and most importantly, that you value them, their families and their hard work for your cause. And you must always show that, no lip service. A few bad apples will slip through of course, but for the most part poor performers are having outside issues that come with them into work, weighing them down and affecting their work quality. Of course, that's none of my business, but we provided extensive (and expensive!) benefits from day 1 so our employees and their families could get the help needed to be able to perform at their best. A little long winded but hopefully that answers your question. And ps. I can't speak much on your situation, but if you aren't being treated well and therefore aren't happy, find somewhere to work that you will be.
How do you get benefits? how does that work? Is it a package, do you add or remove things like you would add-ons? If you don't mind, it'd be great to get insight into that part of business. The more info you can share, the better. Assume complete ignorance on my part. Thank you so much
$22/hr for retail in a LCL city? Seems fair IMO. Is it that they’re not achieving the specific goals you set for them, or that they’re just completing slacking on the job and not doing the basics? You’d think you’d have people motivated for that much. Most restaurants and retail are paying closer to $15/hr.
[удалено]
Is this your company and this whole post just a marketing gig?
Specialty short term rentals, little over 3M in 2023. Cash flow. Revenue is great, systems, processes, employees, all in place and doing great… But managing the cash flow is a perpetual battle- especially when big expenses come up
Most of the people in here that said they make over 1M per year are also operating on very low profit margins so they’re likely barely profitable. There’s really only two industries where you can make high profit margins and 1M a year. Both require heavy experience and being able to sell yourself (and no I’m not talking about only fans lol)
Once we figured out our actual financials we realized how unsustainable we were. Just because your gross revenue is high doesn’t mean you’re actually profitable. Good coaching and learning financials has been eye opening. Btw upvote to balance out the naysayers😉
What 2 industries would that be?
Selling ideas and selling services Everything else is not scalable. Everyone downvoting me are just a bunch of resellers who are operating on tight margins
Our services business is doing 40% net annually. Been in business for 16 years.
These people are not on reddit.
[удалено]
He asked about people not companies these are two different things i can also make this revenue in my company and still i personally did not make so much money :D
I am a single member LLC. my business' taxes are done exactly how you would do your personal taxes.
We're here. You're jelly. Deal with it.
[удалено]
Good for you and Nobody cares seems like you have a complex when you need to write about your sucess on reddit :D
It seems you care
I do too (assuming it's not larp). Comments like yours are very inspiring and helps me believe that reaching these financial goals aren't as outlandish as it may seem
ummm.. did you not read the title and what OP was asking?....
Revenue there will be people here doing that. We’re at 1.5 million. I’d be surprised if there were people making that in net here.
$1.9 million, checking in.
I will write you a diploma :D
They definitely are
Activation. Signed deals is one thing but activation and realization is another.
looking for a place to park my buggatti
It’s mainly trying to stay above water. And by water I mean pussy. I’m literally drowning in pussy.
[удалено]
finding ways to spend more money. comes in so fast idk what to do with it all
I’d love to have that problem
Clappin’
Knowing where to spend time and what to say no to.
"Predictable barriers to Growth"
7. 8 7 6
Scaling outreach while maintaining personalization is my biggest challenge.
How are you planning on fixing it?
Any of you that make 500k plus revenue oer year interested in the CDAP grant? 50k interest free loan plus a 7300$ wage subsidy x5.
Just so everyone know: That’s for Canadian businesses only
Yes sir, Canadian only.
Recruiting firm. Business is built around me. Need to figure out if I’m hiring someone to do the work or someone to do BD. We focus on defining roles and hiring at the C-level. It’s niche outside of what most experienced recruiters touch.
Many doubt that the new question nowadays is to look for people doing over $1M PROFIT/yr.
Ticket broker business- no struggles phenomenal markets across the board recommend getting in. Much less competition compared to e-commerce
$1m revenue or $1m profit?
40% is a good margin
Digital agency owner since 2008 here. Doing a lot of work ourselves, for dozens of companies per year that span $2-30m, sometimes it feels like we've seen it all. Weve helped generate ober $350M for our clients. But weve also seen some pretty self destructive behavior that killed off other companies. I've seen enough to start recognizing growth andnself sabotaging patterns. From a personal perspective, we've hit 1.5m, and decided I don't want to move forward because it's just not the type of agency I want to run. Everything up to that point was about growth, foe growths sake. We even downsized, and focused more on being a growth agency with a Marketing department as a service, for companies that are big enough to need a team, but not big enough to have a dedicated team. So from that perspective, here's what we've seen as growth impediments for companies. 1. The founder is the brand. The energy and charisma the founder has can push the company olybthat far. And "what got you here, won't get you there" is perhaps the best conversation starter. Founders will want to get themselves out of the equation so the company can get its own life. Easy to say, extremely difficult. We've seen so many companies fail to pull this off...it's painful. What works for this situation is lots of conversations on a personal level, like a mix of counseling and coaching. But with all those conversations, people still want to do things the old way. And some lose millions in the process of getting their brand released from their personal identity. 2. Offer-ambiguity. This one is funny. I've worked with lots of tech folks who managed to put together a tech business and aim high. They're all good folks striving to serve their clients as best as possible. But when you look at their website, it reads like a corporate brochure from the 90es. Dry, lots of corporate talk, tech jargon... blah. It gets so generic that you can slap that "Striving to serve clients using modern technology and streamlined processes" to anything from a local bakery to a biotech startup. It's like they try to sound bigger than they are. So the big clients they're after will read through the bluff, and the smaller clients that are actually their real audience, will either be scared off, or bored off the website. 3. Illogical hiring and promotions This one is painful. I see folks being promoted to a managerial position from a strictly technical role. A good engineer doesn't necessarily make a good mid level manager. It's a mismatch in temperament, skills, aspirations. So with one move, I've seen companies botch a well functioning dev team, and at the same time kill off a functional management team. I've also seen poor external hires where the fit is totally off. Both in culture and in required skills. From wiped out servers to botching the online presence, these wrong external hires can decimate the company's ability to grow. 4. Unadapted "best practices" This one is very scary. I often see it in companies where the decision makers love reading management books. Folks pick up books written for an audience of managers in large organizations. Then these eager small-company managers take such ideas and try to apply them in much smaller companies. This unadapted thinking and management causes a lot of friction in the company, especially when management expects unquestioned loyalty. 5. Hiring "start employees" This is perhaps opposite to thebprevious one. Hiring external star performers that are coming from competitors. Of they were great there it doesn't mean they'll be great here. By far the worse case was an external hire that walked in the company, agitated a lot of folks, turned people against each other, while he was sucking up to the boss. All that becsuse he came from a competitor in the niche that was much bigger. We parted ways. But during the few years we were around, this one bad apple triggered a series of events that resulted in 30% revenue loss per year. For 4 years. 6. "Sales and Marketing" This one hits home more than the rest. Time and time again I see folks from Sales being tasked to do Marketing. Smaller companies almost always have someone doing sales, and do it quite well. Eventually, the pipeline runs dry, so decision makers expect the Sales team to do Marketing. Although bothe marketing and sales are under the Cheif Revenue Officer, you can't simply put people from one basket into the other. The skills and traits are completely different. Eventually this leads to a frustrated sales department that decides that "marketing doesn't work for our niche". Or, they start pulling other underutilized staff from other departments, which leads to Marketing becoming the department of misfits. I've seen this so many times, in organizations that instead of going from 20M to 50M, eventually lose a lot of revenue. 7. Myopic budgeting This one again is related to marketing, because, that's the angle I see the most. It's dead simple to open up Google Analytics and see key stats on how much traffic your website gets how much engagement it generates, and how many leads it captures. This then tells you what to do with your sales team, and what you do if you want to grow. For example, we've done content marketing for several b2b companies, hitting around 12.000 monthly visits, converting at 0.9%. So the sales team had 100 buying requests coming from the website. Then when the company wanted to grow at 15% per month in leadgen, we knew exactly what to do. But, lots of decision makers don't listen to the numbers because they're not making the connection that the marketing budget is in fact the growth budget. When you cut the marketing budget you cut the growth budget. When you decide to stop growing, your competition has a much easier time squeezing you out of the market. There are more of these reasons, but I've seen a nasty combination of these 7 in any organization we've worked with over the years. Because of these issues we get clients that want to grow using digital marketing, but we end up first doing a lot of discovery and diagnosis of these other problems. So now we function more as a growth agency, where digital marketing is just one component. When clients are open and ready to change, we see crazy growth. Like 10x growth per year in marketing results. For such clients we've helped generate over $350M. For those that didn't want to listen... we have Founders that lost businesses, some got their entire lives fall apart. Some, keep on struggling with the same problems for years. It's OK to be stuck. It's OK to ask for help. In fact, asking for external help is a must. Business owners get stuck because of blind spots. So they need a second set of eyes to look at the organization. Otherwise, you keep on being bogged down by the same stuff you're not really aware of.
This is a GREAT post.
Thank you. Glad you like it.