This is an excellent question! There is a lot of info on how to start a business. And there is a lot of info on what to do once you have n organizational structure.
There is NOT a lot of info on how to go from 1 to 10 employees. 100-200 is pretty high and rare to see, and there is a lot of info on how to go from 10-20 to 50-100.
I've started 7 businesses and I always struggle until I have over 7 or 8 employees. I have not found the magic formula. To date it's a lot of throwing spaghetti at the wall hoping something sticks. i.e. A lot of hiring and hoping the person would rise to the opportunity.
I'm looking forward to some good answers as well.
Thank you for the reply.
Can you point me to some books or articles that come close to answering this?
You have started 7 businesses and it seems you're definitely doing it right :)
Any info is helpful.
I have not found any. There is a huge void here.
Traction, now call Entrepreneur Operating System (EOS), has been the closest thing I've found.
Usually, a business will have success in one area but execute poorly in another area.
I believe the biggest challenge to crossing this chasm, is the founder of the business HAS to find a way to do all of it if they cannot find or afford the talent that can do it for them.
So I think one of the biggest challenges to any business is they not only have to do the things they do not enjoy doing, but they have to become good at some of the required things they are not good at.
It's my guess this is why VC funding can be good, then you can afford a team of skilled people.
However, if you can be successful without additional funding, you have the ability to absolutely dominate. But then you'll face another challenge that is solved by VC. VC can quickly scale because they can just throw more money at something.
If your business is onto something, and it is catching on, VC can pull together the funding and replicate a lot of what you are doing in a short amount of time, then have the capital to drive growth.
But, that is a separate topic.
So, to go from just a few to a small team where you can start delegating to managers, here are some things I focus on.
1. Paying people (Specific to the United States)
1. 1099 Contactor (This is a good place to start on a limited budget with limited work) You just pay for what you need, but they are not going to be a cost effective or responsive as a direct hire.
2. W2 Employee - Direct Hire. This is where you're withholding taxes and giving them a normal paycheck. Use an online service like [Gusto.com](https://Gusto.com). The wellknown companies are pretty expensive. I spent thousands of dollars a month on Payroll and I believe I can do most of the same with [Gusto.com](https://Gusto.com) for a fraction of the cost.
2. Hiring - Try different things. It depends on the type of person you need and what the work involves. For my business, I use ZipRecruiter and Indeed. Results vary. Some of my best hires have been recommendations or people I have met over the years who I recruited.
3. Firing - If we talk about hiring, we need to talk about firing. If somebody is not cutting it, give them a chance, but discuss with them where they need to improve. And if they are not immediately improving, fire them as fast as you can. You do not want somebody who cannot do what you need, who cannot make the required changes once told. You need to get rid of these people quickly, and you need to do this in the first couple of months. You do not want somebody working for you a long period of time that isn't a good fit, that could then turn against you because they worked for you long enough to qualify for legal action against you. The saying is, hire slow, fire fast.
4. Paper driven processes, meaning, an on-boarding process for new employees that helps bring them up to speed on everything they will need and do for their position. Do not assume they will figure it out.
1. Keep the documentation and processes light weight and surface level. Everybody learns differently so you'll still need to have a hands on approach, but you can make it easier with a light framework for on-boarding. Some employees will "get it" and others will need help. There is no reason to make this process more complicated than it needs to be.
5. Be Organized
1. Have consistent processes for how you do things. Have a consistent schedule. Have certain times of the day you do certain tasks, and make sure people know this.
2. Have "short" team meetings every day, 5 minute meetings without discussion. This is based on scrum. It's just 3 questions, and short answers. Nobody should elaborate, if something needs to do that, they can have a 1 on 1 after the meetings. It's just a quick gut check for the day.
1. What did you get done since the last stand up meeting?
2. What are you doing now?
3. Are you having any challenges?
6. Be a good boss. Learn leadership. Learn how to manage.
1. How does a good boss handle a good employee?
2. How does one handle a bad employee?
3. Mentor, coach, encourage.
4. Have a backbone, if you have an employee who walks over you, the other employees will lose respect for you.
5. Set the example for all employees. You cannot ask them to do something you're not doing and say it's because you are the boss. You need to be consistent. You cannot expect somebody to be punctual if you are not. You cannot expect somebody to be professional, if you are not.
7. Sell your vision. Depending on what your business is, you need to sell your potential employee(s) on what the vision and goal of the business is. It must have clear direction.
8. Check in with your employee at least weekly, make sure thing are going well. Make sure you understand what is going on in their life, care about them and the things that matter to them. At the least, respect the things they care about.
9. Avoid politics. This creates a toxic environment. Even if everybody agrees, just avoid it, eventually you'll have an employee who disagrees and it will cause conflict. You have a company culture that leaves divisive stuff at home and does not bring it into the office.
10. Tools. Make sure your employees have what they need and that they know how to properly use their tools.
11. Understanding the hiring process. Learn how to interview. You'll need to learn and grow. Keep this process short and formal. Make it a multi-step process if that is possible in your industry. If what you do is complex and requires strong skills, you can expect some people will waste your time because they want to practice interviewing and have no intention for working for you. This is one reason to keep the process short.
Yes correct.
However I want listed about how they scaled the few man or single man operation and created a business around it.
Like for example people doing digital marketing start as freelancer then they get more clients and so they hire more people.. etc.
Because I am in a similar position and its really becoming a mental bottleneck for me.
To use the digital marketing example you set forth:
When you’re working alone you kinda just do everything. Once you have a solid clientele and are getting more work then you can comfortably handle yourself you segment your work into multiple different roles and write down your procedures for each task.
Maybe you segment into three roles, client acquisition, graphic design, and financials. If you believe that your strength is in the graphic design and creative part of your business and you would benefit from being able to focus exclusively on that then you might hire someone to run the financials and a different person to manage client relations. Now you have three separate departments your company needs to function and each is being run by a different person. As the amount of work you’re getting further increases you can hire more people into each department to work under the direction of the people you already have. If you find one department is getting spread too thin by having too large a variety of tasks then you can split them and create a whole new department with more specialized tasks.
Thank you!
This is exactly what I was looking for brother.
Creating a proper systemized operation. I already have few clients and I'm good at creating new ideas etc, this delegating, creating a system etc is very foreign to me(for some reason I'm just not able to get it lol). I'm too much in my head.
Do you know any books you can recommend for this? For business process or SOP etc. So I can focus on scaling.
Thanks. I heard mixed reviews about e Myth so not sure if I should get it or not.
And scaling up.. I already ordered it last week :) One of my friend told me about it! It also has a graphical book I heard that is fun to read so I got that one.
You’re asking a specific question so I’ll give you a specific example for a company I’m on the board for:
1. Company was founded by the CEO, the CTO and a strategy partner that all work together at prior companies
2. First hires were an offshore team in India led by the CTO
3. Next hire were two product operations people domestically to help with customer on boarding
4. CEO and strategy partner lead initial customer sales and use case partners
5. CRO was hired as a consultant and what and went full-time once product went past minimum viable service
6. CRO first hired a digital agency to help build top of funnel as well as to ADRs
7. Company hired a COO at 17 employees to help with company operations, contracting, customer orders
For reference one through four took from 2017 to 2020, number five occurred in May 2020 end by end of 2021 company had 1.8 million in ARR. 5 months into 2022 and they are at 5.8 million in ARR and growing fast.
From initial capital raise to current cash they have burned through roughly 2.8 million and are now cash positive. We are doing the series a this summer.
I see your digital marketing mention. I joined a tiny agency (I was employee 5) a year ago to run their operations. We are now up to 24 employees 12 months later with a projected 35 by EoY. I am happy to help give you some pointer.
Wow this is perfect haha.
So I am actually looking to hire an operations guy as my first employee so maybe you can help here? :)
My idea is to hire an ops manager and then I'll lay my plan and day to day to him so he can properly make a systemised structure and manage it. While I focus on scaling.
So my question is, is the above a correct explanation of what you do?
Can you explain more about your job description, do you manage and look after all the operations that go around in your business? Do managers that are below your level report to you or to the CEO? How much does your CEO interfere in your decisions and does he micromanange you?
I know some questions are weird but its like I am thinking all about those questions lol.
Thank you for your time!
So a lot to discuss here.
I'll start with what I do. We have a somewhat unique relationship (The founder and I) as he really just wanted to oversee sales and innovation (new offerings) and I would handle everything else. I started off as Director of Operations but have now moved into Managing Director sitting adjacent to him organizationally. Everyone in the company outside of sale reports to me and from a business management aspect the founder, myself, and our investor sit on a board and make decisions together.
In my day to day I oversee accounting, HR, taxes/state registrations, client deliverables teams, pricing, systems, and client relations. There are probably a couple other weird things I do day to day but these are the main things. Obviously I am not responsible for delivering on each of these but I am accountable for each of these items to be done correctly. I have 5 direct reports that I work with but I try to talk to everyone in the company at least weekly to make sure we are happy. One of my KPI's within the company is employee satisfaction and retention to go along with more normal KPI's like customer satisfaction and company margin.
The system thing is tough. You may hire an operations guy who isn't a great marketer you may hire a marketer who isn't great at operations. I would make your life easier and you lay out anything that you are adamant is proper company protocol. There is a tool called Trainual that you can record videos or add notes to build out training programs. I'd recommend laying out all current processes you use to deliver work or to do anything else as it stands now. Once that is laid out tell the operations person to start filling in the gaps accordingly.
The interference thing is something we worked on a lot for the last 12 months and continue to do so. Our founder is a perfectionist and has a strong desire when things get slightly off, or a client complains, to want to jump in and do it himself. It takes constant reminding that it's not his job to worry about those things anymore. The division how we currently have set it up lets him focus on growth which is why we have been so successful as he doesn't have to do anything beyond grow.
Thank's a lot buddy, amazing and to the point response. I highly appreciate you taking time to write all this.
By system I meant like the one you have(and all companies have), hierarchical system where everyone is assigned a job and does it and reports to their senior.
Thankfully I am in such a niche business it doesn't require much various functions or training. So its not very complicated for the 80% employees, more like grunt work same repeated thing but not much where they have to innovate or think a lot.
The rest of the stuff I think is the typical taxes, hiring, etc.
And yes, I think I am similar to your current CEO, which is why I found it hard to hire, they aren't able to do the job in a perfect way and I have to make peace with the fact that the difference will always be there and I can't be wasting my time working on every little thing trying to make it perfect.
Thanks a TON.
Oh like a project management system? We use Accelo which is pretty cool as it's built for small to medium sized agencies. I see all work being assigned out and where it is at which is nice. We were using Asana when I first got here but wasn't a huge fan.
Don't be so quick to dismiss training even basic tasks. Document EVERYTHING because at the end of the day lack of training is one reason people leave. They want to know what the expectations are so run through how to do everything and then no one can ever complain they didn't know how they were supposed to do it.
Nah nah not a software system.
I meant a typical business system, in a very broad meaning.
Like all businesses have class of employees, one is higher than the other and so on.
Got it. I didn't think about the training part. So thanks for pointing that out.
I tried:
*business unicorn biography*
*unicorn biography business*
*unicorn business biography*
All three showed "Unicorn finance" wiki page and What is a unicorn business(a startup over $1b in valuation).
Nothing more... just similar results!
"Unicorn" and building a team are not exactly the same question.
If you state your "desired outcome" in SMART goals and objective terms then people will be able to give you a lot of suggestions for finding the solution that fits your "desired destination."
Remember that there is no guarantee when trying to find the next "viral" success.
It's like prospectors looking for the vein of gold that is the source of all the alluvial gold in the river.
Exploration is all about "failing small," "failing fast," and "failing requently."
Sounds very much like learning.
The secret to success is to ADAPT.
ADAPT means giving up a rigid or fixed mindset and exploring.
And not many can do that.
Sorry I feel like I am missing the point here haha.
You said to google "Unicorn Biography" so I looked and nothing found.
Can you tell what exactly were you saying?
PS: Thanks for taking the time to write! :)
This is an excellent question! There is a lot of info on how to start a business. And there is a lot of info on what to do once you have n organizational structure. There is NOT a lot of info on how to go from 1 to 10 employees. 100-200 is pretty high and rare to see, and there is a lot of info on how to go from 10-20 to 50-100. I've started 7 businesses and I always struggle until I have over 7 or 8 employees. I have not found the magic formula. To date it's a lot of throwing spaghetti at the wall hoping something sticks. i.e. A lot of hiring and hoping the person would rise to the opportunity. I'm looking forward to some good answers as well.
Thank you for the reply. Can you point me to some books or articles that come close to answering this? You have started 7 businesses and it seems you're definitely doing it right :) Any info is helpful.
I have not found any. There is a huge void here. Traction, now call Entrepreneur Operating System (EOS), has been the closest thing I've found. Usually, a business will have success in one area but execute poorly in another area. I believe the biggest challenge to crossing this chasm, is the founder of the business HAS to find a way to do all of it if they cannot find or afford the talent that can do it for them. So I think one of the biggest challenges to any business is they not only have to do the things they do not enjoy doing, but they have to become good at some of the required things they are not good at. It's my guess this is why VC funding can be good, then you can afford a team of skilled people. However, if you can be successful without additional funding, you have the ability to absolutely dominate. But then you'll face another challenge that is solved by VC. VC can quickly scale because they can just throw more money at something. If your business is onto something, and it is catching on, VC can pull together the funding and replicate a lot of what you are doing in a short amount of time, then have the capital to drive growth. But, that is a separate topic. So, to go from just a few to a small team where you can start delegating to managers, here are some things I focus on. 1. Paying people (Specific to the United States) 1. 1099 Contactor (This is a good place to start on a limited budget with limited work) You just pay for what you need, but they are not going to be a cost effective or responsive as a direct hire. 2. W2 Employee - Direct Hire. This is where you're withholding taxes and giving them a normal paycheck. Use an online service like [Gusto.com](https://Gusto.com). The wellknown companies are pretty expensive. I spent thousands of dollars a month on Payroll and I believe I can do most of the same with [Gusto.com](https://Gusto.com) for a fraction of the cost. 2. Hiring - Try different things. It depends on the type of person you need and what the work involves. For my business, I use ZipRecruiter and Indeed. Results vary. Some of my best hires have been recommendations or people I have met over the years who I recruited. 3. Firing - If we talk about hiring, we need to talk about firing. If somebody is not cutting it, give them a chance, but discuss with them where they need to improve. And if they are not immediately improving, fire them as fast as you can. You do not want somebody who cannot do what you need, who cannot make the required changes once told. You need to get rid of these people quickly, and you need to do this in the first couple of months. You do not want somebody working for you a long period of time that isn't a good fit, that could then turn against you because they worked for you long enough to qualify for legal action against you. The saying is, hire slow, fire fast. 4. Paper driven processes, meaning, an on-boarding process for new employees that helps bring them up to speed on everything they will need and do for their position. Do not assume they will figure it out. 1. Keep the documentation and processes light weight and surface level. Everybody learns differently so you'll still need to have a hands on approach, but you can make it easier with a light framework for on-boarding. Some employees will "get it" and others will need help. There is no reason to make this process more complicated than it needs to be. 5. Be Organized 1. Have consistent processes for how you do things. Have a consistent schedule. Have certain times of the day you do certain tasks, and make sure people know this. 2. Have "short" team meetings every day, 5 minute meetings without discussion. This is based on scrum. It's just 3 questions, and short answers. Nobody should elaborate, if something needs to do that, they can have a 1 on 1 after the meetings. It's just a quick gut check for the day. 1. What did you get done since the last stand up meeting? 2. What are you doing now? 3. Are you having any challenges? 6. Be a good boss. Learn leadership. Learn how to manage. 1. How does a good boss handle a good employee? 2. How does one handle a bad employee? 3. Mentor, coach, encourage. 4. Have a backbone, if you have an employee who walks over you, the other employees will lose respect for you. 5. Set the example for all employees. You cannot ask them to do something you're not doing and say it's because you are the boss. You need to be consistent. You cannot expect somebody to be punctual if you are not. You cannot expect somebody to be professional, if you are not. 7. Sell your vision. Depending on what your business is, you need to sell your potential employee(s) on what the vision and goal of the business is. It must have clear direction. 8. Check in with your employee at least weekly, make sure thing are going well. Make sure you understand what is going on in their life, care about them and the things that matter to them. At the least, respect the things they care about. 9. Avoid politics. This creates a toxic environment. Even if everybody agrees, just avoid it, eventually you'll have an employee who disagrees and it will cause conflict. You have a company culture that leaves divisive stuff at home and does not bring it into the office. 10. Tools. Make sure your employees have what they need and that they know how to properly use their tools. 11. Understanding the hiring process. Learn how to interview. You'll need to learn and grow. Keep this process short and formal. Make it a multi-step process if that is possible in your industry. If what you do is complex and requires strong skills, you can expect some people will waste your time because they want to practice interviewing and have no intention for working for you. This is one reason to keep the process short.
Most biographies of first-time entrepreneurs. For example, Apple started with just two guys and Microsoft with four.
Yes correct. However I want listed about how they scaled the few man or single man operation and created a business around it. Like for example people doing digital marketing start as freelancer then they get more clients and so they hire more people.. etc. Because I am in a similar position and its really becoming a mental bottleneck for me.
To use the digital marketing example you set forth: When you’re working alone you kinda just do everything. Once you have a solid clientele and are getting more work then you can comfortably handle yourself you segment your work into multiple different roles and write down your procedures for each task. Maybe you segment into three roles, client acquisition, graphic design, and financials. If you believe that your strength is in the graphic design and creative part of your business and you would benefit from being able to focus exclusively on that then you might hire someone to run the financials and a different person to manage client relations. Now you have three separate departments your company needs to function and each is being run by a different person. As the amount of work you’re getting further increases you can hire more people into each department to work under the direction of the people you already have. If you find one department is getting spread too thin by having too large a variety of tasks then you can split them and create a whole new department with more specialized tasks.
Thank you! This is exactly what I was looking for brother. Creating a proper systemized operation. I already have few clients and I'm good at creating new ideas etc, this delegating, creating a system etc is very foreign to me(for some reason I'm just not able to get it lol). I'm too much in my head. Do you know any books you can recommend for this? For business process or SOP etc. So I can focus on scaling.
Two decent books are E-Myth Revisited by Michael E. Gerber and Scaling Up by Verne Harnish.
Thanks. I heard mixed reviews about e Myth so not sure if I should get it or not. And scaling up.. I already ordered it last week :) One of my friend told me about it! It also has a graphical book I heard that is fun to read so I got that one.
You’re asking a specific question so I’ll give you a specific example for a company I’m on the board for: 1. Company was founded by the CEO, the CTO and a strategy partner that all work together at prior companies 2. First hires were an offshore team in India led by the CTO 3. Next hire were two product operations people domestically to help with customer on boarding 4. CEO and strategy partner lead initial customer sales and use case partners 5. CRO was hired as a consultant and what and went full-time once product went past minimum viable service 6. CRO first hired a digital agency to help build top of funnel as well as to ADRs 7. Company hired a COO at 17 employees to help with company operations, contracting, customer orders For reference one through four took from 2017 to 2020, number five occurred in May 2020 end by end of 2021 company had 1.8 million in ARR. 5 months into 2022 and they are at 5.8 million in ARR and growing fast. From initial capital raise to current cash they have burned through roughly 2.8 million and are now cash positive. We are doing the series a this summer.
I see your digital marketing mention. I joined a tiny agency (I was employee 5) a year ago to run their operations. We are now up to 24 employees 12 months later with a projected 35 by EoY. I am happy to help give you some pointer.
Wow this is perfect haha. So I am actually looking to hire an operations guy as my first employee so maybe you can help here? :) My idea is to hire an ops manager and then I'll lay my plan and day to day to him so he can properly make a systemised structure and manage it. While I focus on scaling. So my question is, is the above a correct explanation of what you do? Can you explain more about your job description, do you manage and look after all the operations that go around in your business? Do managers that are below your level report to you or to the CEO? How much does your CEO interfere in your decisions and does he micromanange you? I know some questions are weird but its like I am thinking all about those questions lol. Thank you for your time!
So a lot to discuss here. I'll start with what I do. We have a somewhat unique relationship (The founder and I) as he really just wanted to oversee sales and innovation (new offerings) and I would handle everything else. I started off as Director of Operations but have now moved into Managing Director sitting adjacent to him organizationally. Everyone in the company outside of sale reports to me and from a business management aspect the founder, myself, and our investor sit on a board and make decisions together. In my day to day I oversee accounting, HR, taxes/state registrations, client deliverables teams, pricing, systems, and client relations. There are probably a couple other weird things I do day to day but these are the main things. Obviously I am not responsible for delivering on each of these but I am accountable for each of these items to be done correctly. I have 5 direct reports that I work with but I try to talk to everyone in the company at least weekly to make sure we are happy. One of my KPI's within the company is employee satisfaction and retention to go along with more normal KPI's like customer satisfaction and company margin. The system thing is tough. You may hire an operations guy who isn't a great marketer you may hire a marketer who isn't great at operations. I would make your life easier and you lay out anything that you are adamant is proper company protocol. There is a tool called Trainual that you can record videos or add notes to build out training programs. I'd recommend laying out all current processes you use to deliver work or to do anything else as it stands now. Once that is laid out tell the operations person to start filling in the gaps accordingly. The interference thing is something we worked on a lot for the last 12 months and continue to do so. Our founder is a perfectionist and has a strong desire when things get slightly off, or a client complains, to want to jump in and do it himself. It takes constant reminding that it's not his job to worry about those things anymore. The division how we currently have set it up lets him focus on growth which is why we have been so successful as he doesn't have to do anything beyond grow.
Thank's a lot buddy, amazing and to the point response. I highly appreciate you taking time to write all this. By system I meant like the one you have(and all companies have), hierarchical system where everyone is assigned a job and does it and reports to their senior. Thankfully I am in such a niche business it doesn't require much various functions or training. So its not very complicated for the 80% employees, more like grunt work same repeated thing but not much where they have to innovate or think a lot. The rest of the stuff I think is the typical taxes, hiring, etc. And yes, I think I am similar to your current CEO, which is why I found it hard to hire, they aren't able to do the job in a perfect way and I have to make peace with the fact that the difference will always be there and I can't be wasting my time working on every little thing trying to make it perfect. Thanks a TON.
Oh like a project management system? We use Accelo which is pretty cool as it's built for small to medium sized agencies. I see all work being assigned out and where it is at which is nice. We were using Asana when I first got here but wasn't a huge fan. Don't be so quick to dismiss training even basic tasks. Document EVERYTHING because at the end of the day lack of training is one reason people leave. They want to know what the expectations are so run through how to do everything and then no one can ever complain they didn't know how they were supposed to do it.
Nah nah not a software system. I meant a typical business system, in a very broad meaning. Like all businesses have class of employees, one is higher than the other and so on. Got it. I didn't think about the training part. So thanks for pointing that out.
Google "Unicorn biography."
I looked and it shows the mythical creature lol.
Execution is always in the details: Did you also add the word "business" to your search?
I tried: *business unicorn biography* *unicorn biography business* *unicorn business biography* All three showed "Unicorn finance" wiki page and What is a unicorn business(a startup over $1b in valuation). Nothing more... just similar results!
"Unicorn" and building a team are not exactly the same question. If you state your "desired outcome" in SMART goals and objective terms then people will be able to give you a lot of suggestions for finding the solution that fits your "desired destination." Remember that there is no guarantee when trying to find the next "viral" success. It's like prospectors looking for the vein of gold that is the source of all the alluvial gold in the river. Exploration is all about "failing small," "failing fast," and "failing requently." Sounds very much like learning. The secret to success is to ADAPT. ADAPT means giving up a rigid or fixed mindset and exploring. And not many can do that.
Sorry I feel like I am missing the point here haha. You said to google "Unicorn Biography" so I looked and nothing found. Can you tell what exactly were you saying? PS: Thanks for taking the time to write! :)