Consider this tale of two business owners.
One is a talented architect who was wearing too many hats in his business and charging too little for his services.
The other is a successful manufacturer with good cash flow and profits, but experiencing talent and operational issues that could cause his revenue to flat-line a few years from now.
Every business owner will hit the revenue ceiling at some point. The trick to breaking through depends on the owner’s capacity to work on his or her business rather than being immersed in the day-to-day operations.
Here are five ways to break through and spend your time on the right things to help your business grow.
Do you know where you’re headed? Can you measure your progress? These are two of the first questions I will ask any business owner who is feeling stuck.
In the beginning you start out with a great vision, a business plan and some seed money. As you get busy running the business, that vision can change and even disappear.
Set a measurable vision for what you do better than anyone else, the reason you exist and how big you want to be (sales and people) in one year, three years and 10 years. If you aren’t on track with your one-year goal, then you won’t make your three-year goal.
Make sure your vision is just beyond your comfort zone, but not so lofty that it’s unrealistic. Set small milestones every 90 days to make sure you’re on track.
Evaluate the people currently on your team. Do they have the skills to do the work that supports your vision? Are you missing anyone?
Developing an organizational/accountability chart for what your business will look like one year from now is key to having the right people in the right seats. Loyalty aside, be realistic about whether or not you have the right people to accomplish your goals.
This assessment is difficult and can’t be accomplished overnight, but don’t let the people side of your business hold you back.
The architect mentioned earlier was doing too many things in the business rather than delegating, which limited his potential to develop new business.
For the manufacturer, it was a matter of understanding the value (profit potential) of hiring a sales force and knowing that his financial staff was skilled enough to track his progress.
This brings us to data. What are you measuring weekly to support your vision? Most business owners believe that quarterly financial statements and year-end revenue are enough to understand if they are successful; that data is historical and not a predictor of future growth.
Measurables like billable hours, sales closed, expanded business or new leads in the pipeline are weekly measures that can help you work your business plan and generate positive progress toward a sales goal.
Reviewing them weekly with your sales team and billable staff can support a real-time snapshot of your potential.
For the architect, he realized he was charging too little for his services to reach his goal. When he raised his rates, his current clients were fine with it and new clients viewed him as more credible.
The manufacturer, on the other hand, realized that his revenue could flat line if he didn’t get help with sales.
Even if an owner has the right vision, people and data to measure, the company’s internal operations and processes may be causing problems in productivity or delivering products and services efficiently. A lack of clear processes costs money and impacts revenue.
Reviewing how the company delivers products or services can often reveal inconsistencies, internal controls risks and surprising costs.
For example, the architect was trying to handle the bookkeeping and tax work and payroll on his own rather than delegating those activities to others.
This was costing him valuable time developing new relationships with prospects and clients. Once he outsourced those functions to professionals, his personal income grew and he had experts watching out for his tax risk.
You’ve got issues
You don’t know what you don’t know. Issues come up in companies all the time that — if not addressed — drag down a company’s opportunity for growth.
They could be financial, operational or people-based and they need to be discussed and solved in order to reach your vision. Keep a list and work through issues weekly so they don’t become a huge obstacle to growth in the long run.
In his book “Traction,” bestselling author and consultant Gino Wickman outlines these five proven steps to creating great companies that last beyond their competitors.
The five elements of great companies lead to traction, an accelerated business model where everything and everyone in the company is working at optimal levels to support the vision.
In the case of the architect, his personal income has increased $100,000 over 2013. The manufacturer is working elements of his business to reach a revenue goal of $60 million in five years.
Wickman’s Entrepreneurial Operating System (EOS) has been tested over the last 10 years with thousands of companies, resulting not only in more profits, but also better quality of life for owners.
Even if you are not familiar with EOS, thinking about these five elements in your business can help you assess what is holding you back from breaking through the revenue ceiling. What is stopping you from achieving your vision?