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How to Grow Without Breaking Your Business

Apr 14, 2022

 

 

 

Every business that wants to grow will inevitably run into some specific problems at predictable levels within the business's growth cycle. 

 

We call these business plateaus or breakpoints. 

 

If you want to grow effectively, it is essential to know when and how these issues will show up and, more importantly, how to solve them so you can grow without breaking your business along the way. 

 

The first thing to understand is that most businesses are small. Very few ever grow to see more than ten or so employees. This is not by chance; 99% of companies stay small for a reason.

 

On the other hand, 1-2% of businesses grows into publicly-traded behemoths or unicorn tech startups.

 

So, what's the difference? 

 

Firstly, most businesses start with sub-optimal fundamentals. When you build on rocky foundations growing your business is more a process of putting out fires than building on solid systems and processes to achieve sustained and lasting growth. 

 

Secondly, you need to know your key metrics. Not all KPIs are created equal. A small number are significantly more important and even essential to growing beyond the startup phase. 

 

Revenue Per Employee RPE: Business is a game of creating more value for your customer than the net cost of producing that value. Nowhere is this more true than the revenue per employee. 

 

Some of the most successful companies have an RPE of over $1MM, which in and of itself has challenges. If your RPE drops below $200K, you need to start paying attention because it is a hallmark that either something is broken or severely underperforming in your business.  

 

Finally, the most challenging thing when it comes to growing, overcoming breakpoints, and becoming one of the top 1% of businesses in the world is courage. 

 

Courage is essentially just being comfortable with being uncomfortable. Breakpoints and business plateaus are inherently difficult things to overcome. They will stress test you and require you to grow personally alongside your business. 

Entrepreneurs that can embrace the suck, accept it, and willingly walk down this road anyway are the ones who will make it through in the long run. 

 

Putting yourself under constant stress and never settling too deep into your comfort zone in all facets of your life is the best and, in my opinion, the only way to prepare you for what lies ahead.