Carl Gould
About Carl Gould
Posts by Carl Gould:
How to Measure Your Most Valuable Intangible Asset: Your Employees
A company’s assets can be sorted into two buckets: tangible and intangible assets. Tangible assets are things the firm can buy or sell, such as inventory, real estate, equipment, machinery, offices, or company vehicles. Most business owners are pretty comfortable inventorying and appraising tangible assets.
But do you know how to measure the value of your intangible assets: your staff. Are you getting the most out of your employees? Are they as valuable as they should be? How do you know who to hire, which positions to create, and whether a job candidate is the best fit with your firm?
Start By Establishing Measurements for Positions, Not People
Instead of starting with employee traits for an evaluation, start by mapping out the parameters of that position. What should anyone in that job accomplish? Why does the role exist? What purpose does it serve? What personality traits should anyone in the post have? Establishing benchmarks for each job allows you to assign performance standards, desired personality attributes, and expected contributions.
Each Position is Assigned a Personality and a Prototype
Some business owners are uncomfortable assigning an ideal personality for a job. But when you take the current employee out of the equation, you can start thinking about traits that suit the position and match the business culture. For example, should a CMO be outgoing, creative, and enthusiastic in your firm? Does your organization need a meticulous, team-oriented, and predictable COO?
Once you put a personality in place for the position, you add a list of essential functions of the role to round out the prototype. For instance, in some companies, a CMO manages communications, creates sales materials, and handles PR. In another firm, the CMO may also oversee sales. Each company is different.
With position benchmarks in place, evaluating an employee’s or prospects’ suitability becomes much more manageable. If they match the job’s benchmarks well, it will be easier for them to meet your company’s expectations. Therefore, they will probably be more effective, experience success, and consequently show more loyalty. Matching people to benchmarks is a win-win.
The Role of Company Culture
The personalities and prototypes for a job can vary significantly among companies. Don’t assume that all positions look the same in all organizations. The change among industries is significant, so the needs of positions will vary quite a bit. Additionally, company culture plays an important role.
For example, suppose your company culture is innovative, creative, and brash. In that case, you may want an extroverted, big-idea CMO comfortable taking big swings and making a splash with the public.
Conversely, another company may be conservative and research-driven. They may need a CMO with focus and a professional, restrained manner.
Looking at these two examples, it becomes easy to see that companies A and B need two different types of CMOs. Can you imagine how unhappy the high-flying creative would be working for company B? And how frustrated company A would be if they hired a restrained introvert?
Benchmarking Needs Change Based on a Company’s Growth Cycle
In the startup phase, companies operate differently. They must be nimble, run lean, and change quickly to meet market needs. But established businesses should be focused on creating order, systems, and processes that allow them to scale up.
That’s why it’s wise to revisit benchmarked job descriptions as a firm grows. For instance, independent workaholics are invaluable initially but can get in the way once systems are in place. Process-driven staffs are excellent for a large organization but can be ineffective in the launch phase.
Benchmarking is the First Step to Increased Productivity
Benchmarking is not an exact science. Assumptions are made based on your circumstances. But it is an effective way to begin inventorying and leveraging your company’s intangible assets. Creating benchmarks for each position makes it much easier to identify and find people who can achieve their full potential within your organization. You start to hire better “fits” with your culture and requirements. You’ll also identify existing employees who may not fit into the company structure.
If you can find the right person to do the right job, you’ll be happier, they’ll be more productive, and your company will grow faster.
Scripts are for Closers
Selling Your Business? Avoid These Mistakes!
Selling a business is not as straightforward as selling a house. After all, a company is a complex organism, and only some (or maybe none) of the value lies in physical assets. I’ve built and sold multiple businesses in my 30+ year career. In those first sales, I learned from my mistakes. And after a few hard knocks and some intensive research, I now know there’s a better way. If you’re considering selling your business now or in ten years, this article can help you avoid common mistakes.
Mistake #1: Doing It Alone
Most of us don’t sell companies very often, so very few entrepreneurs are experts at selling firms. That’s why so many business owners bring in a few professionals. Start before the sale by hiring an experienced business valuation expert. They will assess the firm to determine the fair market value. This valuation gives the owner an idea of how much the enterprise is worth “as is” and should also provide pointers to improvements that will increase the size of future offers. Often, with a few small improvements, you can substantially increase your market value.
Your financials will be held to a very high standard during a sale, so even minor errors or omissions can cause big problems. A reputable accounting firm with experience in business mergers, sales, and acquisitions, can help your internal accounting team compile financial statements and documentation in sale-friendly formats. Accounting consultants will help the team create, modify, or clarify income statements and balance sheets, catch errors, and ensure financial records and documents are above reproach.
Corporate law attorneys specializing in sales and acquisitions can handle legal or regulatory situations that may affect a potential sale. In addition, those same lawyers should be on hand to review contracts and agreements, such as leases and vendor contracts, to ensure they are transferable to a new owner.
Mistake #2: Choosing the Wrong Type of Sale
Business sales can be structured in a variety of ways. Each type of sale has its own benefits and drawbacks. So, make sure you’re working with a business consultant and a corporate attorney who understand sales and acquisitions.
We’ve listed the most common sale structures here.
Private Equity Firm
These buyers usually have the financial resources and expertise to grow a business. However, a private equity firm may have a short-term investment horizon, which means they are focused on maximizing their return on investment rather than maintaining the long-term viability of a company.
ESOP
An employee stock ownership plan (ESOP) enables employees to purchase shares in the company over time. Employee ownership rewards staff members and ensures that the firm is run by people who are invested in its success.
An employee ownership consultant may be required because the Employee Retirement Income Security Act (ERISA) of the Department of Labor and the IRS’s Internal Revenue Code section 404(a)(3) govern ESOPs, so deviations from the prescribed process, intentional or accidental, break federal laws.
Succession
While it may seem simple to pass on the family business, it’s important to formalize the process to address legal considerations and prevent anyone from contesting ownership. The transfer should be formally documented and detail valuation, taxes, and ownership structure.
Individual Sale
If an individual wants to buy the business, the process should start with a letter of intent (LOI) outlining the proposed terms for sale. Owners should also qualify individual buyers before moving forward by conducting background checks.
Selling to a Competitor
Your business may have the most value to your competitors. These types of sales usually require the seller to agree to non-compete clauses, which may limit their ability to run businesses in the future.
Mistake #3: Not Hiring a Consultant
It’s easy to view consultant fees as an expense, but when it comes to selling a business, their role is to minimize risk and maximize the asking price. Good consultants are not cheap, but their recommendations can protect owners from legal and financial threats. A consultant’s recommended improvements to the business can add millions to the asking price. And accountants’ contribution to bookkeeping can prevent costly delays or dropouts. When you look at the bigger picture, you can’t afford to keep them out of the process.
Want to learn more about how to get your business ready for a profitable sale? Contact 7 Stage Advisors today and start talking about your business.
Advisory Boards Are the Secret to Growing a Business
Starting a business is easy enough, but running it can be complicated. One set of skills is needed
to launch a business, and another set is required to expand sales and profits. And let’s face it;
not all businesses get it right. In fact, 20 percent of new companies fail in their first year, and
only half will survive past year five.
Most business owners will face challenges, make mistakes, or miss opportunities. If they don’t know
how to navigate tricky waters, they can quickly find themselves in real trouble.
Beating the Odds
Working with a team of experts is one of the best ways to beat the odds. And forming an advisory
board is an incredibly effective way to routinely access expertise from various fields. An advisory
board is a secret weapon that allows entrepreneurs to make well-informed decisions. It amplifies
the skill and experience of the primary decision-maker and helps them avoid costly mistakes.
The board’s primary function is to provide access to business expertise. It should include a
skilled business attorney, a tax adviser, and an accountant. Sometimes the same person handles two
of these roles, but it’s wise to consider keeping them separate to allow specialized focus on
different aspects of the business.
Who Should Be on Your Advisory Board?
Include a board member who understands key performance indicators and critical paths to success.
They know how to set attainable goals, push growth, and measure success. This individual should be
able to measure the company’s performance against competitors and spot challenges and opportunities
early on.
As a firm grows, the advisory board may also develop. The experience of retired CEOs, business
owners, and industry specialists all bring additional expertise.
Accountants can also add real value. They can act as a reality check for proposed expenses or
expansions.
What do Advisory Boards Do?
To responsibly drive growth, boards must handle various tasks. Here is a typical to-do list for
advisory boards:
• Determine or refine unique selling point
• Continually research competition and provide updates
• Benchmark sales, profits, expenses, and growth
• Evaluate capital investments and payback timelines
• Assess expansion opportunities and weigh risks
• Evaluate price, product, and service offerings
• Review profit and loss statements
• Refine and improve billing, inventory, and shipping strategies
• Ensure tax compliance and identify strategies for tax savings
• Proactively identify legal concerns and ensure compliance
• Optimize salaries, staffing, and hiring
Who Manages the Advisory Board?
At every stage, a strategic advisor will help manage the advisory board. A consultant or coach can
fill this role. They run board meetings and use owner feedback to create agendas. They also
coordinate follow-up and ensure each board member contributes.
Using a strategic facilitator, the business owner can serve as one member of a team instead of the
ruler. The advisor is there to see the whole picture, allow all voices to be heard, and make
educated decisions about the next steps. It’s a specialized set of skills but critical for
continued business success.
Set Up Success
Formally creating an advisory board and using a facilitator to drive progress is one of the most
effective ways for your company to set up for long-term success. Boards can compensate for blind
spots, reduce tunnel vision, or avoid tripping over profit-draining surprises. When the owner
encourages a team of experts to improve the business, they not only improve the
survival rate but also create a path to long-term profits and growth.
CLG Collective Podcast – The Value Builder System with John Warrilow
Episode 008 - John Warrilow
John Warrillow is the founder of The Value Builder System™, a simple software for building the value of a company used by thousands of businesses worldwide. John is the author of the bestselling book, Built to Sell: Creating a Business That Can Thrive Without You, which was recognized by both Fortune and Inc magazines as one of the best business books of 2011. Before founding The Value Builder System™, John started and exited four companies.
CLG Collective Podcast – Shark Attack with Paul de Gelder
Episode 004 - Paul de Gelder
In this episode of the Carl Gould Collective Podcast, Carl Gould interviews Paul de Gelder, a former paratrooper in the Royal Australian Army and Navy clearance diver. Paul shares his journey from being a peacekeeper in East Timor to become a member of the elite dive team. He also talks about the varied and exciting roles he played as a clearance diver, including underwater battle damage repair and land-based EOD.
Here are the top three takeaways from the podcast:
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Embrace challenges: Paul talks about how he faced numerous challenges in his life, from being kicked out of his home at 17 to having his deployment to Iraq revoked. Despite these setbacks, he remained determined to find his dream job and poured his heart and soul into becoming a Navy clearance diver. His message to listeners is to embrace challenges and use them as an opportunity for growth.
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Pursue your passion: Paul discovered his passion for diving and used it as a way to move up in his career. He says that finding your passion is crucial to achieving success in life. He advises listeners to try new things and explore different interests to find what truly excites them.
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Be adaptable: As a clearance diver, Paul had to be adaptable and prepared for any situation. He talks about the varied roles he played as a diver, from doing underwater battle damage repair to land-based EOD. He advises listeners to be open-minded and adaptable, as it will help them navigate any situation they may face in their personal or professional life.
Overall, Paul’s story is one of perseverance, determination, and embracing new challenges. His message to listeners is to find their passion, embrace challenges, and be adaptable to achieve their goals.
CLG Collective Podcast – Father of Modern Networking, Dr Ivan Misner
Episode 013 - Dr. Ivan Misner
In this episode of the Carl Gould Collective podcast, Carl Gould interviews Dr. Ivan Misner, the founder of BNI, the largest business networking organization in the world. Misner discusses the thought process behind starting BNI and his vision for creating a networking group that was both relational and focused on business without being mercenary. He merged these two ideas to create the core value of “givers gain,” which emphasizes helping others as a means of receiving help in return.
Misner also talks about the challenges he faced when starting BNI and how he created systems and processes to scale the business. He read “The E-Myth” by Michael Gerber and followed his advice to work on the business, not in the business, and create an org chart as if he were going to franchise the business. Misner explains that BNI operates as a licensing model, where individuals can pay a fee to use the BNI name and system, and the organization also generates revenue through training, events, and other services.
Throughout the interview, Misner emphasizes the importance of accountability in networking and how BNI encourages members to be active participants and contribute to the group. He also shares tips for effective networking, such as building relationships with others, being specific about the referrals you’re seeking, and following up consistently.
Overall, the interview provides valuable insights into the founding and growth of BNI, as well as the principles of effective networking that can benefit any business leader or entrepreneur.
The top three takeaways from the interview are:
- Accountability is key to success in networking groups, and BNI has an attendance requirement and encourages members to bring referrals regularly.
- Dr. Misner’s plan to scale the business involved creating systems and processes, writing everything down, and creating an org chart as if he were going to franchise the business.
- The success of BNI is due to its focus on relationships and helping others, as well as its consistent adherence to its core values.
CLG Collective Podcast – Building Your Personal Brand with Rey Perez
Episode 001 - Rey Perez
Global Branding Expert, Rey Perez talks about personal branding and how it can help business owners and CEOs build relationships and attract more clients. Rey talks about the importance of personal branding for service and product-driven businesses and for those who are the face of their business. He emphasizes the need to leverage digital resources like the internet, social media, and websites to build relationships faster and create something that can be leveraged over and over again.
The difference between a personal brand and a business brand is explained, with personal branding being about the person behind the business and their unique qualities, skills, and experiences. Rey provides examples of how personal branding has helped people attract more clients, build trust, and establish themselves as thought leaders in their industry.
Top Takeaways:
- Building a personal brand is crucial for entrepreneurs and CEOs who are the face of their business, as it allows them to create a connection and relationship with potential customers before they make a buying decision.
- The internet, mobile devices, and social media provide entrepreneurs with a powerful digital resource to build relationships with customers faster and more efficiently and leverage their time and efforts.
- A personal brand is different from a business brand, and involves creating a clear and consistent image of yourself as a thought leader and expert in your industry while showcasing your unique personality and values. It can help entrepreneurs stand out in a crowded market, and establish credibility and trust with potential customers.
Thrifting
Carl-Gould-WPTVWestPalmBeach-Thrifiting
Find Ways to Reduce Risk to Get More First-Time Customers
Anyone who owns a business knows that getting first-time customers isn’t
easy. That’s because every purchase, big or small, represents a risk. In fact,
no matter how good, valuable, or inexpensive your product is, it’s risky. And
people don’t like risks.
On the other hand, we know that consumers make first-time purchases all
the time. We also know that people try new things to obtain well-established
benefits such as increased status, less cost, more convenience, or better
quality. But getting a customer to switch isn’t always easy. Unless your
customer has a self-identified paint point (not cool, too expensive, poor
service, unreliable), they will stick with the choice that is “good enough for
now.”
The secret to getting new customers–lots of them–is to research what risk
your product represents and then find a way to eliminate or compensate for
that risk.
Reduce Risk With Trial Offers
One way to reduce risk is to motivate trial. Instead of requiring a customer to
buy all of your product or service, let them try a little bit. These bite-sized
offerings present less risk, are usually less expensive (or free), and are an
effective way to reduce the downside of purchase.
Sometimes bite-sized offerings come in easy-to-identify packages, such as
free samples, limited-time offers, discounted first purchases, or trial-sized
products. Reducing the risk by paring down the purchase size minimizes the
barrier to trial.
Digital businesses are well-versed with the benefits of trial offers. Before
committing to a paid package, the company often allows people to sign up
for a week or a month. Mailchimp, SEMRush, QuickBooks, and many
business software companies use this model. Then, users can try out the
features to see how easy they are to use and figure out how they work with
other software.
Free at First
Sometimes you must remove every obstacle to get people to try. That’s why
more and more companies, especially new services, give people something
for free at first. Some of the most innovative businesses around offer free
trials. Are you considering getting Netflix, Hulu, Amazon Prime, or YouTube
TV? Sign up for a free trial first. You’ll get 30 days free, and you can cancel
anytime. Of course, you give them your credit card before you get your free
trial, and it’s up to you to remember to cancel. Easy to try. Easy to buy. But
maybe a little harder to cancel.
Eliminate Risk With Samples
When it comes to hard goods, customers also struggle with the risk of trying
a new product or service. And this is especially problematic in the DIY world.
The painting industry has created many creative approaches to make people
feel more comfortable with their options. Benjamin Moore has done a great
job of allowing customers all sorts of trial options, including paint sheets and
trial-sized paint samples. Others soon followed. Sherwin Williams now offers
9”x 14.75” peel and stick sheets. And most big box stores now sell eight-
ounce paint samples made to order.
Bite-Sized Service
For some large ticket items, it’s essential to get the customer to try early so
they can create lifelong commitments. That’s why bite-sized offerings also
work well in service industries. For years, banks have offered free checking
accounts to attract new customers, who are later offered bank loans, savings
products, and investments. The banks work on getting customers in early.
They sacrifice smaller, immediate profits in favor of lifetime value.
In another example, over the past few decades, healthcare systems across
the country have spent a lot of time and money developing top-notch
women’s and babies’ centers, based on the realization that births are often
the first time adults interact with a hospital. If a couple has a good birth
experience, they are more likely to return to the parent system for other
needs.
Tiered Offerings: Good/Better/Best
One of the most effective ways to draw in new customers is to create well-
defined tiers. These allow clients to choose their risk level while creating the
groundwork for the most premium offering. Airlines are a classic example of
the effectiveness of tiered offerings. Most flights offer economy (good),
business class (better), and first-class (best). First-class often costs hundreds
more than economy class. The airlines constantly tout the value of their top
tier, even forcing economy passengers to walk through the spacious first-
class cabin to get to their seats.
In recent years, the airlines devised their own version of the trial offer. If
first-class seats aren’t sold out at the full price, airlines often offer every
passenger the ability to upgrade when they check in, sometimes for less
than $100. This offer is removed once the first class is full. Offering upgrades
for unsold seats encourages more people to enjoy the luxuries of the first-
class experience, eventually persuading them to buy top-tier tickets.
Ready to Develop Your Own Risk Reduction Offer?
Trial offerings, free-at-first deals, and bite-sized offerings are all around you.
So take a look at your industry with a fresh eye. Which offerings do you need to create to attract first-time buyers? How can you reduce the perception of risk? Which small purchases make customers aware of your upscale offerings? Are estimates or seminars part of your trial offer? What are your company’s good/better/best options?
With a bit of time and creative thinking, you’ll be able to use find options that reduce initial risk and drive more people into your sales funnel. And once that happens, it becomes much easier to grow your business.
Working Remotely
Compass Media Network – This Morning America’s First News
How Owners Can Love Stage 5 of Business Success
When helping businesses find ways to grow larger and more profitable, I start by analyzing the company’s current stage. If they are in Stage 1, it’s time to create a strategic plan. If they are in Stage 2, the owner runs the organization and becomes an industry leader. In Stage 3, it’s time to start delegating essential tasks to senior people, and in Stage 4, systems are created that allow the owner to scale their workforce.
By Stage 5, many owners are a little bored. Some want to make major changes. They might wish they had the next big idea to catapult the company into the big leagues. And that presents a risk. The complacency or boredom that sets in at Stage 5 can also drive the founder to lose sight of the things that made the firm successful in the first place.
So resist the impulse to disrupt a reliable revenue stream or sacrifice dependability. Instead, work on ways to build on past successes. This is the time to create a franchise-type system. That means that instead of focusing on the nuts and bolts, the founder will spend time building an authentic brand that has incremental meaning and value. Innovation at this stage is not about what you do; it’s about how customers perceive you.
Get in Touch With Emotional and Psychological Needs
Building a brand involves finding more powerful ways to meet your customers’ emotional and psychological needs. It’s time for the business to grow beyond making or doing.
Meeting needs beyond delivering goods and services is a way to create emotional equity. Once you do that, you’ll be able to transition into a franchise-type system that replicates an experience, again and again, no matter who is leading the company, no matter who is selling the product, and, for many companies, no matter where you do business.
What Does Franchise-Type Business Success Look Like?
There is a long list of companies that added emotional equity to their offerings and were able to expand as a result. The stronger the emotional equity is, the further that equity can be stretched or applied to other divisions.
Whole Foods started in 1980 with just 19 employees at one location in Austin, Texas. In 2017, Amazon purchased Whole Foods for $13.7 billion, a purchase price that well exceeded the value of the stores and distribution. Amazon openly admitted it was paying for the value of the brand. Whole Foods developed a meaningful experience that they could recreate at the location after location until eventually, the experience became more valuable than the sum of its parts. Their emotional equity turned out to be worth billions.
What about stores that don’t have retail outlets? The same principles apply to mail-order exercise equipment (Peloton), airlines (Southwest), entertainment (Disney), packages (FedEx), and the list goes on.
Why Owners Love Stage 5
It’s not always easy to reach Stage 5, but once the organization is ready to scale up in this way, something magical happens: the owner no longer needs to steer the ship every minute.
With systems in place and brand-building efforts in progress, it’s now possible for the owner to leave for a day (or a month) and return to find that the business ran successfully without them. The firm no longer relies on the passion and push of one person.
Stage 5 also offers the chance for better margins. Again, think about the Whole Foods example. When it started, competitive pricing was a challenge. The store needed to be priced low, or it would lose business. Fast-forward to 2017; Whole Foods was nicknamed “Whole Paycheck” because it was a pricy place to shop. But that didn’t keep people away. Why? Because even in price-sensitive industries, businesses with incremental value don’t have to match the competition’s low prices.
Finally, Stage 5 is the time to grow exponentially. With solid systems in place, a strong leadership staff, and well-defined incremental value, it’s possible to expand distribution quickly, open new locations, or even bring in other owners. How fast and how high is up to you.
Want to Learn More?
Want to find out more about The 7 Stages of Small Business Success ? Take a look at my best-selling book, listen to my podcasts, or watch for me as a featured speaker at your next big industry event. And if you want personalized attention to help you solve your company’s unique challenges, contact 7 Stage Advisors for assessments, coaching, and recommendations.
WCBS TV Interview
Mayor Adams says city employees must return to work in-person, no hybrid schedules allowed!
President Biden meets with Fed Chair
WPHL PHILADELPHIA TV INTERVIEW / Live –
https://phl17.com/phl17-news/president-biden-meets-with-fed-chair/
The Arthur Aidala Show
What about Crypto currency?
https://omny.fm/shows/the-arthur-aidala-power-hour/the-arthur-aidala-power-hour-5-13-22
Which Kind of Fish Does Your Business Need to Grow?
When it comes to categorizing employees, you can use all kinds of
organizational principles such as sorting by department, by seniority, by
team sizes, by tenure, and more. But many firms overlook another important
categorization: muddy fish or clean water fish.
Every employee can be categorized into one of these two categories. One
isn’t objectively better than the other. In fact, both types are great when
they’re in the right job. That’s why it’s so important to understand how and
when these two different personalities meet the needs of your business in
every stage of growth.
What are Muddy Water Fish?
Employees who do well with ambiguity are Muddy Water Fish. They do best
when the waters around them are murky. These staff members embrace
uncertainty, solve problems as they go, and move forward comfortably even
if they can’t see the way.
Muddy Water Fish require a particular environment in which to thrive. They
don’t like a lot of rules or dress codes. They can take an idea and run with it,
so they don’t need much structure. In fact, regulations and processes often
slow them down, and they know it.
Muddy Water Fish are able to drive rapid growth in the early stages of a
company’s development. They work independently, and they don’t need
much infrastructure to excel. But as your business grows, their working style
can become disruptive. A firm full of Muddy Water Fish might be innovative,
but it will have problems scaling up.
Muddy Water Fish will be important in Stage 1 (Strategy), Stage 2
(Specialty), and Stage 3 (Synergy) of Business Success. But they can
present a challenge in later stages.
What is a Clean Water Fish?
Many employees fall into the category of Clean Water Fish. These folks want
to be able to see what’s next. These process-driven individuals work best within an established framework. They need order and goals, and don’t do
well with ambiguity.
Clean Water Fish work best in mature companies with well-developed
processes. They want direction and appreciate evaluations. This type of
worker wants contingencies for every eventuality. And importantly, they
work well in large groups.
While Clean Water Fish often show up early in process-driven departments
such as accounting, they are rarely present in large numbers in a firm’s early
days. In the first stages of a business’s growth, the Clean Water Fish’s need
for organization stresses them out. They swim towards order, stability, and
continuity. They shy away from risk.
Clean Water Fish might be especially helpful in Stage 4 (Systems), Stage 5
(Sustainability), and Stage 6 (Scalability) of Business Success. But they
may slow down progress in earlier stages.
Are There Any Downsides to Muddy or Clean Water Fish?
Muddy Water Fish may create a cloud of muck to protect themselves from
scrutiny and potential dangers. Confusion or obscurity can be a form of job
security for this type of employee, so they won’t always play nice with
others. It’s also common for Muddy Water Fish to resist attempts to create
processes, regimens, and order.
Clean Water Fish come with their own set of challenges. They feel vulnerable
and insecure without processes in place. They aren’t always good at taking
leaps of faith. They get upset if others “break the rules” or if exceptions are
made to established procedures. Their need for order can trigger chronic
procrastination and become a barrier to progress.
Business Owners Start as Muddy Water Fish, and Transform into
Clean Water Fish
While it’s easy enough to categorize employees, this analogy also applies to
business owners. In the early stages, most entrepreneurs are Muddy Water
Fish. Founders must be flexible to adapt quickly to a variety of market
situations. Comfort with uncertainty is a requirement.
In a firm’s early days, the focus is on sales and growth, not checks and
balances. As a result, entrepreneurs usually surround themselves with other
Muddy Water Fish who are also comfortable with a startup environment.
However, to transition a firm to the next level, the founder must transform
into a Clean Water Fish. Eventually, owners must say goodbye to the
startup’s short-term vision and reliance on intuition. Scaling and stability
require systems, checks, and balances. It’s a common issue in company
growth. If the owner doesn’t transition from the invention mindset to a
process-driven approach, their own support teams will eventually view them
as a liability.
There is a Place for Both Types in Most Organizations
Once a business has a steady revenue stream, it’s time to put systems and
processes in place, which means it’s time to clean up the water. As the
business morphs from a scrappy startup into a going concern, it’s time to
staff the growing enterprise with Clean Water Fish who see the vision,
embrace the processes, understand cooperation, and want to create
consistency.
But don’t get rid of all your Muddy Water people. While most won’t do well in
the new world of systems and processes, some still have a place in the more
fluid environments that continue to exist in areas such as sales and
marketing.
Every well-established, successful firm has areas that demand order and a
few pockets of ambiguity that require more flexible employees. By
understanding the fundamental differences in working styles, you can stock
your firm with the mix of Muddy and Clean Water Fish that help you meet
your goals.
Why Business Blind Spots Can Cause Your Firm To Crash
Most drivers know how to identify blind spots on the road, but did you know that we also have blind spots in business, and if we ignore them, we can get sideswiped? Read full article by clicking on the link below.
Once the Strategic Plan is Done, It’s Time to Conquer Stage 2; the Specialty Stage
Some entrepreneurs want to wait until everything is finalized
before they dip their toes into the actual startup. Others are
more comfortable with ambiguity. But the fact is, no matter
how much you plan, there will be a lot of surprises in startup
mode.
But creating a plan, and sticking to it, is how most successful
companies manage to grow in predictable ways. As most of
you know, I call these the 7 Stages of Business Success.
The first stage is planning and development. And once you
have just one paying customer or client, the company
catapults into Stage 2, the Specialty Stage.
Once the company has made a single sale, the owner has
officially created a job for themself. That initial sale pushes
the enterprise out of the concept stage and into the tasks
and to-do list phase. It’s time to run a real business.
Stage 2 is the Time to Build a Reputation
In these early days, it’s time to hone your skills and become
known as the best in your industry. So look around and study
your competitors. How can you be more knowledgeable,
additionally certified, better qualified, or a cut above the
rest?
In Stage 2, the owner needs to work out the most effective
ways to be seen as the best choice. Credibility is essential for any business’s long-term success, but it’s also critical for
short-term profits. After all, you’re the new kid on the block,
and you have a lot to prove. You are the leader of the firm, so
you must be superior just to keep up.
Don’t dismiss the value of accreditation. If you need to get
certified or take classes, do so. Make sure you have the
highest professional credentials available. Whatever is
required to be considered highly proficient, do it now.
For some business owners, that will mean taking more
classes or acquiring new initials for their titles. But some
entrepreneurs can use exceptional experiences as proof of
superiority. For example, if you’re a former Olympian opening
a gym, promote your story as a unique qualification. The
same principle applies to an ex-White House housekeeper
opening a cleaning service or a plumber who apprenticed at
the Empire State Building. If you’ve encountered special
events or challenges that make you better suited or more
experienced, your customers should hear about it.
This is Also the Stage to Get Obnoxious
Lately, I’ve been talking a lot about obnoxious offers (it’s the
topic of my next book). When a business owner thinks about
what customers want–that no one else is bothering to give
them–and then figures out how to deliver on those needs,
that’s an obnoxious offer.
Stage 2 is the perfect time to develop your own obnoxious
offer. After all, you probably already know what your
competitors are doing wrong or what your customers wish you would do. So why not find a way to address these unmet
needs?
For example, in my first business, a commercial landscaping
company, I discovered that missing deadlines could make my
clients lose money. That’s why I created a premium package
that guaranteed on-time completion and included a one-year
warranty. For a 30% premium, I would ensure the job would
be finished on the agreed-upon date. No excuses. I took some
risks to offer this guarantee, but my customers loved it and
lined up to pay more.
I also got a lot of business based on a much smaller promise–
all calls returned. Many guys didn’t bother returning calls, so
people were impressed when I returned every call. That
simple promise was a foundational part of creating a million-
dollar company.
Obnoxious offers are ways of telling people you are the best.
Think about the factors involved in your customers’ purchase
decisions, identify a real pain point, and remove it. Every
business is different. But if you eliminate frustrating barriers,
you’re way ahead of the game.
Is Stage 2 Where Your Business Wants to Stay?
Some people like to stay in Stage 2 and maintain a hands-on
role. They remain both the owner and the star of the show.
Other entrepreneurs move on to other business models. One
is not necessarily better than the other; both strategies can
be wildly profitable.
For example, Billy Joel is still in Stage 2 of his business model.
He is the star. Who wants to attend a Billy Joel concert with no Billy Joel? If Billy Joel sourced his job out to another
musician, the value of his recordings and concerts would
plummet. In this model, when Billy Joel stops performing, he
essentially closes his business. If he wants to continue
making money, he will need to change his business model in
ways that don’t depend on his personal and ongoing
contributions.
You may think that all music acts have to be a Stage 2
business, but that’s not necessarily so. Mannheim
Steamroller is a set of musicians, run by a management
team, who can play worldwide, sometimes in two or more
locations at once. No one pays to see a particular musician.
Instead, concert-goers pay for an experience.
Understanding Business Stages Helps You Grow
Predictably
Understanding how businesses grow and what’s critical to
improve in each stage puts your business on the path to
predictable growth. For more information, check out my
book, The 7 Stages of Small Business Growth . This
volume explains how businesses expand, ways to manage
development, and how to sequence growth in ways that
maximize momentum and profitability. Or email me
at [email protected], and let’s talk.
Housing Sales are Hot, but is this Also a Good Time to Sell a Business?
There’s no doubt about it. We are in a very hot housing market, but is it a
good time to sell a business? Most indicators point to an attractive business
sales market as well. After months of operating in a “wait and see mode,”
many private equity groups and investors are ready to spend. Not only is
there pent-up demand, but potential buyers are eager to take advantage of
low-interest rates. This combination may make this a great time to sell your
company.
However, market conditions are only one reason to sell a business. But if the
hot market has made you think about putting your firm up for sale, you’ll
need to prep to get the best offers possible.
The sale price of your organization can vary based on a range of factors.
When buyers evaluate a firm, they want to see a productive culture. A strong
company must have sustainable systems in place. Buyers are also interested
in the history of expansions, if there are multiple locations, the possibilities
of franchises, or the presence of affiliate programs. And, of course, a
business needs to demonstrate a history of steady or growing sales.
When You’re Getting Ready to Sell, You are in
Stage 6: the Salability Stage
Stage 6 of Business Success is the Salability Stage. If you have taken your
firm through Stages 1-5, you are in a great position to get the maximum
asking price. However, if you’re unsure where you are in the business
development cycle, you may want to revisit the goals and strategies for
Stages 1-5 in my bestselling book) .
Stage 6 firms are reliable money-makers and don’t need personal passion
and drive to continue to generate revenue.
But being in Stage 6 does not necessarily mean that your organization
attracts a great asking price. If you intend to sell in the coming months or
even a few years from now, you may still have some work to do to ensure
that investors and buyers make great offers.
Get a Professional Business Valuation Early
A professional valuation helps identify the cosmetic upgrades needed to
increase company value. Get it early in the process, well before you solicit offers. The valuation should include an exhaustive analysis of your business
and encompass the value of everything in your inventory.
Once the valuation is completed, you can address any issues identified in
ways that increase the assessment. It should also help you avoid spending
money on parts of the business that won’t add to the selling price. Best of
all, once you have completed a professional valuation, it’s easier to
recognize a good offer when it comes your way.
This is Not the Time for Big Improvements
Avoid a company overhaul. While it may be tempting to dress up the firm, at
the end of the day, you’re selling the predictability of future revenue. Solid
systems and controls should be driving the business. So, make sure you
retain key hires and keep core competencies in place. It’s okay to make the
firm look slightly better, but this isn’t time to mess with the magic that got
you this far.
An office remodel or a logo upgrade are easy changes. These kinds of
cosmetic upgrades can make your company a bit more attractive to sellers.
In addition, by upgrading things such as package design, the building facade,
and marketing materials, you add a little credibility to the success of your
organization. But again, this isn’t the time to mess with systems or controls
or move critical employees.
Organize Your Financials
When you’re getting ready to sell, make sure your P&L is attractive,
organized, and easy to review. Buyers will request a financial audit before
completing any business purchase. You may also want to improve your
company credit and reduce financial liabilities. With a strong P&L statement,
excellent credit, and minimal liabilities, your firm will be more attractive to a
broader range of buyers.
Need Help Prepping for Sale?
While this is an excellent time to sell a business, getting ready to sell can be
complicated. Mistakes can cost you millions. So, if you’re thinking about
getting your business prepared for sale this year or in ten years, let 7 Stage
Advisors help. Email me at [email protected], and let’s talk about how
you can get your business ready for a fantastic offer.
Stop Chirping and get Serious About Business Strategy
If you’ve ever had kids, you know you will end up watching a lot of movies
that you might otherwise skip. Years ago, one of my children dragged me to
“March of the Penguins,” and, as expected, it wasn’t my favorite film ever.
If you’ve never seen it, it focuses on one penguin who searches endlessly for
a partner. Finally, after miles and miles without much luck finding other
birds, he shuffles over a high hill and sees tens of thousands of penguins.
This is where he’s going to find a mate.
He starts chirping loudly, but the problem is that thousands of other
penguins are also chirping loudly, so he hardly sticks out. And even though I
didn’t come away a big penguin fan, that one scene did seem to be a perfect
example of poor strategy. We (businesses) are chirping and all of us sound
the same. We’re making a lot of noise, but it’s almost impossible to stand out
when you’re competing with others who are doing the same thing.
You Can’t Eliminate the Noise, but You can be
Different.
Whether you’re a mating penguin or a determined entrepreneur, you are
surrounded by competitive noise. I’m not telling you anything new when I
say that consumers are exposed to thousands of messages each day. You
can’t eliminate the competition, but you can revise your business strategy.
Start by letting go of “the best” title. Everyone says they are superior. Even
businesses with clearly inferior competitors can’t convincingly claim that
they are the best. It’s a standard marketing message that was invented the
same day advertising was created back in the Stone Age. It’s a parity
message, and it’s a complete waste of time.
No matter how much better you are than your competition, saying you’re the
best won’t get the attention of customers, and it certainly won’t convince
them. Your best prospects have already encountered hundreds, even
thousands, of businesses that have claimed to be the best, and most didn’t
live up to their own hype.
Do Things That Prove You’re the Best
Focus on doing the kinds of things that clearly position you as a leader and
an expert. And do things in ways that communicate confidence in the quality of your products or services. Instead of saying you’re the best, work on proving it.
So instead of saying you’re the friendliest repair shop, start learning your
customers’ names. Train your staff to take time to talk to clients, learn about
their lives, and understand how they use their vehicles.
Instead of saying you’re the fastest lunch spot in town, start offering a 5-
minute guarantee, telling customers that they have their food in 5 minutes
or the meal is free.
Instead of boasting that you’re the best law firm, start publishing articles for
the local press, become the go-to firm for local TV stations, and get your
lawyers to teach at the local university.
Doing things that position you as a leader is WAY more effective than simply
saying you’re the best. When you greet customers by name, when you offer
a ground-breaking guarantee, or when you’re all over the local media, your
best clients will see that your company is the best without you ever chirping
a word.
Avoid Sacrificing Competence for Convenience
I often talk to business owners who know what their customers really want,
but the owners also have a dozen reasons why doing the right thing “won’t
work.” It’s too hard, too expensive, or no one else does it.
In fact, I’m sure you can immediately give me a dozen reasons why the three
examples I just shared (of being the best) will never work. Allow me to beat
you to the punchline…
In my first example, that friendly repair shop would have to do everything
differently. Do you know how hard it is to remember faces and names? And
to get all of your staff to do it? And do you know how angry some customers
get when the people ahead of them in line are just chatting about their day?
And how can you possibly track the use and background of each vehicle?
What about a 5-minute guarantee? How can they possibly serve lunch, every
time, in 5 minutes? What if there are long lines? What if there are tons of
people? How can the kitchen handle that volume?
And the law firm can never be on TV or in articles because they might say or
do something wrong. How can they ask partners to teach a class? When will
they handle cases? It’s the most inefficient approach in the world!
But the truth is, in each of these three examples, those businesses
absolutely COULD be those things, but these changes will require that they
rethink how many parts of their business work. They will have to commit to
spending more time making their customers happy. Instead of being good
enough, they will have to commit to being extraordinary.
Meeting customer needs in the ways your competition can’t (or won’t) isn’t
always efficient, but it is effective. This approach isn’t the easy way. And
that’s why most businesses never do it.
Stop choosing convenience over competence. When it comes to your clients
or patients, or customers, stop choosing efficient processes and start making
effective choices that result in a a company that attracts profitable, loyal
customers.
When you begin building a company that stops taking the lazy route (saying
you are the best) and goes well out of its way to do things that make it the
best, you are no longer chirping. You’re clearly better and every customer
knows it.
Be Brave. Be Different.
If you want your business to be better, bigger, and more profitable than your
competitors, you must do things differently. And doing things differently is
difficult and inconvenient. But I’ve built a series of multi-million dollar
enterprises on this principle, and I’ve helped thousands of companies do the
same thing in over 100 countries around the world. So I know it works.
If you’re ready to be brave and be different, shoot me a line, and let’s talk
about ways to get started. [email protected]
The Power of Sales Scripts
A good script can address concerns and provide robust responses. Moreover, effective scripts train your team on how to close. Read the full article HERE
Becoming a serial entrepreneur with multimillion-dollar businesses with Carl Gould
guest on Entrepreneur Lifestyle podcast with Ben Ivey, listen HERE
For Continued Growth, Owners Must Stop Working Longer and Start Scaling Up
Like every other aspect of life, business is full of myths and legends.
Business owners are taught to admire founders who gave it their all. They
didn’t have a personal life, and they worked night and day to build their
business. They slept at the office. And sometimes, that is a legitimate part of
building a business.
But creating a large business doesn’t require the owner to work 100 hours a
week, week after week, forever. Very few businesses fail because the
founder didn’t work hard enough. When companies get to a certain size and
stop growing, it isn’t because an entrepreneur isn’t giving it their all.
The fact is that the blood, sweat, and tears of one person can only take a
business so far. And the secret to growing isn’t working longer or harder: the
secret is scaling.
Yes, hard work and dedication are definitely helpful, but that’s not the whole
story. Launching a business requires a considerable time commitment and
lots of personal sacrifices along the way. The owner of a typical startup
begins doing everything partly because they are good at what they do and
partially because it saves money. While the “give it all you got” approach
can be exciting (and necessary) for a while, it can quickly become
unprofitable. The founder gets tired. They focus on the wrong things. They
make mistakes. They spend all their time executing tasks instead of
orchestrating strategies.
Avoiding the Overwork Trap
Sometimes the more you do, the harder it is to stop. That’s how business
owners get trapped in a cycle of 100-hour weeks. But once your business is
launched, it’s time to delegate, orchestrate, and find people who are better
than you. Because no matter how good you are at any one task, there are
many people for hire who are better. Find a better accountant. Find a better
sales director. Find a better facilities manager.
Instead of handling all functions, as the owner of a growing business, you
must create structure, assign tasks, and build a solid team. As an enterprise
grows, it’s time to train other employees to lead the way, and that can be
scary. But by allowing hired experts to own the success of parts of the
business, you create a well-rounded team with more experience, bandwidth,
and focus.
And once the team is in place, you can concentrate on vision, quality control,
and business strategy. Throughout history, every successful business owner
had to make this transition, and you can too.
Lean on Systems and Processes
Asking others to help run your business is a big step. There’s a lot at stake,
so you want to provide as much structure and guidance as possible. That’s
why systems and processes are an essential part of scaling a business.
Creating predictable, reliable processes makes it easier for any business to
satisfy customers, expand trade, and maintain margins. That means that
each job, department, and specialty will need its own set of systems, checks
and balances, and processes. And as the owner, you will need to lead the
creation of formalized systems and processes and enforce adherence.
How does that work? Let’s start with a smaller example. Many business
owners issue checks to vendors. Maybe an assistant opens your mail and
lays a pile of bills on your desk to pay. Most are pretty straightforward, and
they take just a moment to settle. Occasionally, sorting out vendor issues
can suck up an hour or more. But on average, the task takes an hour or so of
time each week. So it’s not worth hiring an accountant for that, right?
But when start analyzing your process, you may realize that you spend
another hour or so each month tracking down invoices or trying to keep your
invoicing system in order. And maybe you spend another two or three hours
each month trying to track expenses and income and figure out profits.
Perhaps you want to learn more about pricing and determine if you’re
charging enough or too much. And you wonder if you should expand the
offices and if you could get a tax break doing it.
In this case, you are spending your time doing an accountant’s job, and
you’re also avoiding related tasks that take more time. A good financial
officer not only pays bills but also handles vendor relations. They ensure
clients and customers are paying on time. They may create new payment
systems like credit card payments, Venmo, or PayPal. They should be well-
versed in tax law and be able to advise you on ways to get the best tax
credits from your expenditures. And they can review competitive pricing and
make recommendations. The accountant can also create monthly P&L
statements, explore lines of credit, and recommend more cost-effective
suppliers.
In other words, letting go of a small but vital task (paying bills) empowers
you to add a team member who adds exponential value. In this example, it’s
easy to see how devoting more time and attention to the books can quickly
reap significant improvements and how adding this key hire creates the bandwidth needed to scale.
But of course, delegation is not just limited to
accounting. What about the sales tasks? Which marketing responsibilities are
you heading up? Do you have HR experts taking care of hiring? Who is
managing your facilities? Who is in charge of IT? A long list of tasks, initially
managed by the founder in the start-up phase, need to be delegated if a
company wants to scale into a seven-, eight-, or nine-figure business.
How Scaling Works: The Dentist Example
When explaining how scaling works, I often use the example of a dentist
opening a practice. At first, the dentist invests in property and equipment
and sees as many patients as possible to pay the bills. Unfortunately, he’s
overextended and scared to hire a lot of people, so he hires just one
receptionist. In this example, the dentist is doing as much as possible to
make money, trying to pay off debt, and working very long and hard to do it.
But with just one dentist and a receptionist, there’s a clear manpower limit,
which slows the practice’s growth.
Now dentists often hire hygienists to help increase their bandwidth. After all,
if two or three hygienists do most of the patient work, the dentist spends
much less time with each patient, so they could theoretically triple the
patient load. The practice may need another chair or two, so it’s not a
complex addition. But if the dentist in our example does this, he is still
working more than 80 hours a week and has to be there for every
appointment.
To really scale, that dentist is going to have to think of a bigger end game. Is
the goal to work with patients all day, or is the goal to serve patients AND
have a more profitable dental practice? Could the dentist employ other
dentists? What tasks could he delegate? Yes, he may be able to reduce his
hours by hiring an office manager, an accountant, or a tech consultant, but
these hires also give him the ability to expand. Could he have offices all over
the city? Throughout the state? Across the country?
In this example, if the business owner stopped focusing on “doing” and
concentrated on vision, he could create a practice with multiple locations.
Thousands of appointments could take place, and the dentist would not have
to be present at any of them. With systems, checks, and balances in place,
it’s possible to scale the practice, which means the owner could increase
profits 10x or even 100x while working fewer hours.
By creating new roles and delegating responsibilities, the dentist spreads out
work. He allows his staff to specialize. This dentist will assign different tasks
to people who have the time and expertise to handle them quickly and
efficiently. And with staff and systems in place, he doesn’t depend on any
single person to be present every day–including the himself.
Start Scaling Up
To scale up quickly, owners must focus on building systems, automating
duties, creating processes, and building an organization that runs well with
or without them. While you may have been chief cook and bottle washer in
the early days, if you’re ready to scale your organization, it’s time to
orchestrate, refine, and build. And that’s when exponential growth can begin.
If you want help finding ways to scale or strengthen your structure, systems,
margins, or succession plan, email me at [email protected].
The Great Resignation
Carl Gould returns… With ‘The Great Resignation’ continuing and labor shortages in many industries this may be the year you ask for a raise. Employers in businesses big and small are desperate to attract, and more importantly, retain employees. Listen HERE
Burn out is an epidemic among American workers
Why is everyone burnt out? A therapist and consultant both join The Factor to discuss. Watch the full interview HERE
Expert shares advice for small businesses owners amid Omicron surge
Many small businesses have had a tough time since the pandemic began. Business growth strategist Carl Gould joined us on Good Day Rochester with some advice for small businesses owners on how to stay afloat as the omicron variant has the number of new COVID-19 cases at a new high. Watch the interview HERE
The Bill Meyer Show – KMED & KCMD Radio
Carl Gould, business expert, digs into what the GREAT RESIGNATION is all about, and how workers, and businesses can best work through it.
https://podcasts.apple.com/us/podcast/01-05-22-wednesday-7am/id631607011?i=1000547060591
How To Measure The Tangible And Intangible Factors Necessary For Business Growth
Check out Carl’s latest Forbes article HERE
Bad Bosses keep Workers from Returning to Work
Carl is interviewed by Isiah on Fox 26, watch the video HERE
ABC7 News at 7 Roundtable Discussion
Watch Carl’s discussion HERE
Practical Tips on Growing or Launching a Business
In this podcast serial entrepreneur and best-selling author Carl Gould shares with us how he uses his own entrepreneurial experience to help business owners who want to grow their companies or expand personally as a leader. As a business coach, Carl has been told that he’s a “time machine” that can show you what the future could look like and how to get there. It’s then up to you to decide what you want your life to be about. As you build your legacy, Carl offers practical advice for every step of the way. In fact, the last stage in Carl’s seven stages of business success is the “succession stage” in which a legacy business is born. Listen HERE
Nationwide Christmas Tree Shortage
Carl is interviewed on Fox 26 Isiah, watch HERE
How to Grow from 1 Employee to 1,000 Employees (or More!)
People start out as a one-person business for all sorts of reasons. Some
people set out to follow a passion. Others get tired of layoffs and start a
business to gain control of their professional life. Others realize they can
actually make more money selling their skills directly to clients. But no
matter what drove the creation of the firm, the majority don’t start out as
well-funded start-ups. Most new businesses begin small and grow from there.
If you’ve created a business, and you’re just one person, growing can feel
intimidating, risky, or even impossible. But it can be done. In fact, many
successful firms have expanded from 1 person to 100 or 1,000 employees or
more. But there are things all companies must do to get scale up quickly and
profitably.
Some Advice About the First Hire
A solopreneur works alone. Most one-person businessowners have a core set
of skills. They use those skills as the product, and also sell, fulfill, and take
care of the invoices. In the very beginning, most business owners are the
CEO, CMO, Sales Director, CFO, and all the rest. It’s very typical to see a
solopreneur who sells and executes during the week and on nights and
weekends, they focus on the billing and administrative duties.
It usually doesn’t take too long for a one-person shop to realize that if they
want to continue to grow, they need more manpower. And when that time
comes, we are adamant that the very first hire should be a good numbers
person. Seasoned accounting skills are critical for profitable growth no
matter what size the business. Whether the company is a start-up, pre-
revenue, or if you’re pulling in a million plus, an excellent financial hire is
needed to organize your cash flow. And let’s face it, for the majority of
solopreneurs, their cash flow is a mess.
When we work with a single-person outfit, it’s typical to discover that they’re
not sure of profit margins. They don’t know if their offerings are priced right.
But when you hire a financial expert, a bookkeeper, or a controller, the
company now has somebody paying attention to expenditures, cash flow,
pricing, and profits. A qualified financial officer serves as an invaluable
guidepost who makes sure that you’re getting it right.
A common error is to start by investing in sales and marketing first. Now,
sales and marketing are key, but unless you already know what you’re
spending, where you’re pricing, and what financial formula makes the most sense for the best margins, you’re spinning your wheels. Who wants more
unprofitable sales? Make sure your financial person can provide the kind of
reporting that tells you that you are getting it right. Then, and only then, can
you look for your next employee.
Are You Growing or Scaling?
So many of our clients tell us that they want to grow. Very few tell us they
want to scale. There is a big difference between the two. Understanding the
distinction between growing and scaling is actually essential for any
business, so read these next paragraphs carefully.
When a business owner makes a new sale, they are growing. They have
more business. When a company grows, it may bring in more money,
become busier, and get more clients. And all of that is good stuff.
But simply growing means that the business owner is still an employee. The
owner of a growing enterprise must be involved on a day-to-day basis and do
more and more to grow. Some business owners tell us they don’t want to
grow because they’re at capacity. The owner is already working full time,
and then some.
But scaling involves a different scenario. When an owner scales the
company, they aren’t simply spending more hours at work. Scaling is about
creating systems and predictability so that others can take over parts of the
company. Owners don’t have to worry about getting too many clients to
service or too many people to manage, because they have employees who
take over those duties. Financial people take care of billing and taxes, and
lines of credit. Sales teams manage client relationships. Human Resources
find the right hires for the right job. An owner who is focused on scaling
assigns selective control to their employees. Of course, these workers must
understand the company mission, vision, values, and purpose. With systems
in place, a firm runs profitably because it follows processes that create
consistent results over time. Scalable organizations don’t rely on the
bandwidth of a few people. Instead, it can grow almost infinitely on the
strength of its systems.
We often cite the example of the owner of one grocery store vs. the owner of
100 grocery stores. Does the owner of 100 stores work 100 times harder?
No. In fact, with good systems in place, the owner of 100 stores is more likely
to be able to walk away from the business for a day or a week or a month,
and the company hums along without them.
What Does Planned Growth Look Like?
Early on, we researched what all successful companies have in common. We
discovered seven very clear steps to creating a large, successful business.
We used this research to form the 7 Stages of Business Success. Stage 1
is strategic planning when you get a compelling and inspiring set of ideas out
of your head and onto paper.
Then you go to Stage 2, the specialty stage. Whether you’re a solopreneur or
working with a team, in Stage 2, the owner becomes an expert in your niche.
They are thought leaders, speakers, consultants, or have a particular set of
achievements or awards. They are now recognized as an expert in their
niche. That expertise is an integral part of price flexibility. You need fat
margins early on to carry you through later stages; when you sell more, but
margins can shrink.
Stage 3 is the synergy stage. The business is expanding, and it’s time to
surround yourself with people that help get the job done. This is the time to
create a top-notch implementation team.
In Stage 4, you make a giant leap into the systems stage. You decide what
kind of business you’re going to be. Will you be a closed ecosystem like
Apple? Want to franchise someday? Should you be multi-location? Where do
online sales fit in (if at all)? You decide on your ecosystem and systematize
accordingly.
Stage 5 is all about scaling. Systems become the star. How you do it makes
you different, and that makes it easier to scale. Think of Starbucks, FedEx,
Panera, or Uber. These companies can show up almost anywhere, and you
know you’ll get the same experience (mostly) whether you visit in Seattle,
Sarasota, or Shanghai. Systems and processes allow these companies to
duplicate success in multiple locations.
Once you’ve got systems and scaling covered, it may be time to consider
Stage 6, the salability stage. This is when the company is an asset that can
be bought or sold. Yes, everybody is working hard in and on your business,
but your firm now has standalone value that is working for you. Suppose you
want to sell your enterprise. This is the time to polish the books, clean up
any debts, and make it an attractive asset to sell or take public.
Stage 7 is the succession stage. A business becomes a legacy, and you can
confidently fire your first employee (yeah, that’s you!) You are replaced with
a CEO, and the value of your business actually increases because the market
recognizes that the firm’s success is no longer dependent on one person: the
company has a great leadership team in place.
Is it Time to Turbo Charge Your Business Growth Cycle?
Whether your business employs one person or 1,000, it’s always a good idea
to strengthen structure, systems, and strategic plans. 7 Stage Advisors offers
coaching and mentoring to business owners to help increase predictability,
fortify margins, or even create an exit plan. Contact us HERE
Supply Chain Issues – Advice for Small Businesses
Carl talks to Fox News Rochester about the supply chain issues small businesses face this Christmas. Watch the interview HERE
Thanksgiving Expected To Be Most Expensive Holiday In History
Carl Gould is a business expert with 7 Stage Advisors in Butler.
“The consumer price index is up about 5% right now … You should expect things to be 5-10% more expensive.”
Gould says this could be a year to get creative.
“Coming from an Italian family, as I was growing up, you know, Thanksgiving for me was as much about pasta as it was a turkey.” Watch the full interview – https://newyork.cbslocal.com/2021/10/27/thanksgiving-2021-costs-expensive
The problems with the Supply Chain and how it affects all of us
“At the end of the day, a business has to fulfill customers,” Mr. Gould said, in defense of companies hiring extra workers in preparation for the number of them that will inevitably leave. If an employee decides not to show up to work one day, then there is no product that day, simple as that. The employee didn’t lose anything in that exchange besides a day worth of pay but the business lost out on crucial customers and revenue. By over-hiring, the company is protecting themselves as “60-80% of somebody’s net worth is tied to their business; it HAS to work for them.” This behavior of hopping between jobs and quitting ones as soon as it becomes more demanding may seem impolite and in poor taste, and it is, but it is not their fault. Check out the full article below: