By the time your business reaches the million-dollar level, complexity starts to creep in. No longer a mom-and-pop shop, you start experiencing “big company” issues that can derail you, distract you, or, if you focus, start your business on a new growth curve.
Ideally, to move your million-dollar business to the multi-million-dollar level, you need to move from being a doer to being a CEO. You need to evolve into that role and backfill your former position with talented specialists.
Let’s now assume that you’ve committed to being a growth-focused CEO and want to expand your seven-figure business to eight figures, or even nine figures. Instead of scheduling review meetings all day, what’s the best use of your time and talent? Here are the five things you—as a leader and CEO—should focus on to help add a zero to your revenue.
1. Company Vision and Direction
Great success happens twice. First, you visualize it—then you actualize it. As a leader, it’s your responsibility to lay out your company’s vision and inspire your team, so they’re all on board. Consider where you want to be three years from now. Develop your vision and then articulate it clearly to your team. Rally around it. Get energized by it! Make it so compelling and straightforward that every team member feels motivated! And be sure it’s easy enough to remember that they can recite it enthusiastically.
I’ve seen US$300,000 revenue businesses that are more profitable than US$2 million businesses. High revenue isn’t necessarily an indicator for high profits or sufficient cash flow. You’ve got to keep a close watch on managing your cash. First of all, be sure you have the right accountant—one who provides an income statement, cash flow statement and balance sheet every month. Next, brush up your understanding of the key metrics for monitoring your company’s ongoing financial health. These metrics may include sales by service or product, margin by service or product, average account size, cost per lead, response rates, conversion rates, operating expenses and revenue per employee. Study the trends for these metrics. Are they improving or getting worse? What’s the reason behind that? What steps can you take to improve them?
3. Right People in Right Roles
You know putting the right people in the right roles is crucial. But what you may not have realized is the importance of having the right people not for where you are today―but for where you want to be three to five years from now. When you hire, hire people who will still be effective when your business is five times larger than it is now. Don’t just hire people who are okay for your current level but would be in over their heads if you grew five times bigger. To find these people, leverage the power of assessment tools that measure behaviors (how they do what they do) and motivators (why they do what they do).
4. Key Relationships
Relationships, both inside and outside the company, drive your business. There are approximately five pivotal relationships that you must own in your role as CEO. To determine who these key figures are, ask yourself, “What relationships would cause the company deep trouble if they suddenly vanished?” Once you’ve identified these key relationships, you must own and nurture them regularly by getting together, breaking bread and staying in close contact.
5. A Plan for Lifelong Learning
The business climate continues to grow more complex, so if you don’t implement a solid plan for staying up-to-date about your industry, then you might as well kiss that added zero goodbye. Formulate a plan to keep current that includes reading select periodicals or online sources that provide critical industry news and information. A few suggestions include The Economist, This Week in Startups and Essays by Paul Graham. Attend a few industry events every year, go to an EO Singularity University or other EO executive education program, or join a coaching or networking organization to stay well-versed in running a business. As a lifelong learner, you will be positioning yourself for proactive growth instead of reactively trying to save your company when the industry or business climate changes.
Boldly leaping from seven figures to eight is not an easy task. Concentrate on these five key CEO activities and then work tirelessly to achieve your goal!
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