The Holy Trinity of Business Growth: People, Process and Metrics

Once you get to 50 employees, you stop growing.

At a recent seminar, I heard this interesting observation about data growth. They went on to share that you will remain unprofitable until the company grows to around 200 employees.

This happens in large part because of unexpected overhead.

At that size, business owners have to start investing in non-billable employees. these are the people who enable your core competency to deliver on its promise. It's the people in middle management, accounting, IT and HR.

One strategy is to grow as fast as you can throughout this stage, so that you can reach 200 employees. However, while it might sound appealing, this sets you up for many issues down the road.

It's true: Growing too fast can do more harm than good.

If you want to remain profitable at all stages of business, you're reading the right article. In today's post, you'll learn the three things you need to focus on in order to remain profitable at 50 employees and beyond.

Yes, you're going to need to manage overhead costs. But it's also true that you need remarkable talent in order to take things to the next level. Neither of these realities means that you need to be unprofitable.

It just means you need to understand how to manage the hurdles.

And it starts with 3 things…

1. People

Google might want you to take a mobile-first approach, but it’s really about PEOPLE-first.

“You can have the best strategy and the best building in the world, but if you don’t have the hearts and minds of the people who work with you, none of it comes to life.”

-- Renee West

Don't worry about the new overhead positions. It's just a sign that you have a larger company with complex needs. That's a good sign of a healthy company.

This feels like a hurdle, but it doesn't have to be.

You might feel overwhelmed by the additional HR needs and frustrating technology. But it doesn’t have to sink the ship.

Start by hiring specialist. It seems counterintuitive, but it works.

Then once you're ready for the full-time hire, you can let go of the consultants, train full-time employees and never become unprofitable.

Invest in Talent

You need talented people in order to grow a successful business.

"Never doubt that a small group of thoughtful, committed people can change the world. Indeed. It is the only thing that ever has."

-- Margaret Mead

Small companies often pay small salaries. This keeps them from attracting the industry's top talent. Yet, at the same time, that's exactly what they need. Top talent.

And this is one of the toughest issues your face when growing the company.

How do you get the attention of top talent?

… especially when you don't have the resources to compensate for it appropriately.

It happens through other types of incentives.

Consider offering equity consultant. Or offer a commission of new business brought in. There are ways to get creative.

It still won't attract everyone, but it just might attract the right person.

Choose Wisely

Startup founders rarely have much hiring experience. Sometimes they will know how to get people for the front lines, but hiring senior management is a whole different ball game.

Lacking experience here can cost the company big time.

You have to know how to choose the right top talent. It's not just a matter of shiny resumes and charismatic interviews. And if you pick the wrong person, you're left with an underperforming, overpaid wet blanket.

Hire From Outside

Many new leaders want to promote from within the startup. While this is a noble cause, it's often a naive strategy.

There will come a time when you can train and promote your loyal employees, but now is not that time. As a startup, you don't have the resources to train an entry-level employee to become a manager. You will one day… Today is not that day.

Find outside talent that can properly lead your employees. Hire brilliant leaders who love to teach. That way, when the time comes, they can train those below them.

You can set the process in motion to eventually operate that way, just don't put it in motion yet.

2. Process

I'm going to warn you, this part rarely feels fun.

It's about creating a library of documents and processes. This is your way to communicate exactly how you want things done. As a new business owner, it's easy to micromanage. But people are more than capable of accomplishing a task.

At the same time, they need direction. Otherwise, they're going to do it their way and you're going to expect it your way. That's not good for anybody.

Document and processes allow you to set expectations. It's also a way for you to judge talent, productivity, and usefulness to the team.

Without a documented set of processes, it's impossible to scale.

There's no way for you to clone yourself that many times. But a library of document allows you to put everything in your brain to paper. It's an insurance that the company grows and operates in a way that you like.

It's also a way to save time. Because with all the miscommunication that would come without the documents, also comes a lot of time-consuming meetings.

3. Metrics

Finally, metrics.

It's easy to overlook this point, and many often do. But this is an equally important aspect of growing a profitable startup. And it's vital to your ability to scale.

Metrics form how your company is doing on a monthly, weekly and daily basis.

When your business is small, you know what's going on. But when you have a lot of people handling a lot of different aspects, you need someone else to tell you.

Proper metrics include more than just a profit-and-loss statement. It includes various important aspects of your startup. It'd be nice if you could read the list of metrics you need in this article, but that's not possible.

Why? Because every business is unique.

You will need to develop your own metrics. This is the measuring stick by which you will judge the company as a whole. It's the way you'll know that things are going the way they should.

And as long as things are going the way they should, you can keep growing.