DateFebruary 7, 2020
CategoryBusiness, Business Excellence, Business Owner, CEO, Executive Coaching, Goals, Growth, Leadership Development, Renaissance Executive Forums
From what I’ve seen in working with business owners and CEOs here in DFW, there are three essential skills needed to survive to change from start-up to sellable. This can be seen in the story of McDonald’s, which is celebrating its 80th anniversary this year. Maurice and Richard McDonald founded the company in 1940. They spent almost ten years tinkering with their business before they introduced the “Speedee Service System”—techniques that were pulled from the factory assembly line to serve customers quickly. The two brothers ran their single-location hamburger stand for almost 20 years before Ray Kroc came along, asking to franchise the concept. Mac and Dick had the skills to create a successful one-location business, but it was Kroc who took their modest restaurant and made it world-famous.
What Got You Here Won’t Get You There
While these talents are prerequisites for getting a business off the ground, they become a liability as time goes on. These three skills are essential to survival as a start-up that you must eventually “unlearn” to grow a business:
In the early days, when cash is scarce, you need to be flexible. Instead of hiring full-time employees, you may need to subcontract work to a partner. This arrangement works well as you pay subcontractors only when you have work, and they pay their expenses. You also stay flexible when dealing with customers. If you’re starting up, you’re likely not in a position to dictate to your prospects, so you listen and adjust to suit their needs. Instead of setting up a physical location, you may create a makeshift office by patching together a home office or working out of a coffee shop.
All of this bootstrapping allows you to get your business off the ground on a shoestring budget. The problem is that being too flexible can start to become a liability. Your contract employees may have other clients and can’t be at your beck and call when you need them. Your customers may start asking for many customizations that the only person in your company with the skills to fulfill their special requests is you. Eventually, a customer will want to see where you work and may think less of you if your office is your car.
If you’re self-financing your business, you have no choice but to make it profitable from day one. If it doesn’t make you money today, you don’t do it. This discipline of getting an instant return on cash invested allows us to get a business off the ground. Still, the problem with fixating on immediate profit is that it can undermine your ability to grow. For example, redesigning your website won’t make you more profitable this month, but it could be a necessary investment to attract larger contracts from more significant customers in the future. It’s true that you should never overlook profitability entirely. Still, it’s a good idea to place an equal emphasis on all results—even if it doesn’t pay off right away.
With no money or people to delegate to, a new business owner gets things done on her own. Many of us grow to enjoy doing things our way and fear things might get messed up if we give them to someone else. Since we can do every job in our company, we often keep doing some things long after we should. But once you start generating more profit, a few extra bodies are necessary to ensure you’re managing your calendar appropriately and not wasting time. If you’re not self-reliant in the early days, you won’t even get a business off the ground. But at some point, your inclination to roll up your sleeves and do it yourself can be what stops you from growing.
What is a strength can be a weakness as you grow.
Flexibility, thrift and self-reliance are the essential ingredients of any start-up. For your company to become a world-beater, you somehow have to unlearn those tendencies for a new set of skills. How are you doing to move from the start-up feel to a mature, healthy business someone would be willing to pay for someday?
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