Entrepreneurial Maturity

(27304)

Description:
1. Generating steady sales growth to move from the $50 million mark to the $100 to $300 million range
2. $50 million+ in revenue
3. 350+ employees (Functional employees now organized into business units)

Problem: Sales slow down and may plateau

Challenge: To become entrepreneurial again

Opportunity: Get the business to run itself

Skills:
1. Get going
2. Selling
3. New products
4. Managing well
5. Hire superstars

As much as it may sound like this is a problem you’d love to have, by the time your business has revenues of more than $50 million, the natural forces of the universe will combine to flatten out your growth. To offset this, you’ve really got to decide what kind of role you now want to play. There are basically four options:

1. You can continue as an employee: but this will probably create bottlenecks, and your time is probably of more value elsewhere.

2. You can stay as a manager: but by this stage your Profit Center Managers will already be doing well, and having you hanging around will be a distraction rather than a help.

3. You can keep being a business builder: but your company is now so big and sophisticated that it gets harder to make your ideas applicable and understood.

4.You can act as a wealth builder: treating your company like a valuable asset and figuring out what you need to do to be enhancing its values.

By the time you get to Stage Four, the majority of your time will be spent as a wealth builder. You’ll have to reassess the role you want to play quite deliberately, buy you’ll have good options available. The key is to find work that interests you and something that you care about.

Since you’ll probably be your company’s main investor in Stage Four, you’ll probably want to stay actively involved in continuing to grow revenues. You can now achieve this several different ways:

Seek out new joint ventures.

Make strategic acquisitions.

Plan ahead for selling your business or going public.

Probably the best change you can make at this stage is to stop back from acting as CEO and instead become an adviser to your company. That will free you up to think clearly in the wealth building mind-set rather than getting caught up in the day-to-day dramas that will be occurring all the time. Just keep in mind that as an adviser, your Profit Center Managers and the new CEO are not obligated to do what you say. They can listen to your advice, but then make their own decisions. Unless you give your senior management team this kind of autonomy, you’ll feel personally responsible for every decision that needs to get made and the stress will wear you down.

By stepping aside and letting your business run itself, you can act as an investment manager. You can reinvest profits in building your business rather than pulling out the majority of the income generated each year. You can figure out where to go from here. Counterintuitively, you add value to your business in Stage Four by doing less, not more.

Your three obvious Stage Four options will be:
1. Sell your business privately.
2. Take your company public.
3. Make acquisitions to keep growing your business.

As you navigate through these options, keep a few guidelines in mind:

Good businesses actually worth buying are very rare. Buy only what you know, and always have a Plan B in mind if the acquisition ends up taking a different path to what you expected.

Going public is glamorous, but the reporting requirements are quite horrendous. Only consider going public if there is no other feasible way for you to fund more growth.

Selling your business outright may sound appealing, but do that if you can stay involved as an adviser to the company? By this stage you won’t really need the money, and six months after you’ve sold, you’ll probably be bored with playing golf. You’ll look around for something interesting to do. Why not retain ownership of the business you’ve already built and stay involved playing whatever role takes your fancy. This really is much more fun and engaging than sitting on the beach.

Starting and owning your own business is–and always will be–the best job in the world. Don’t settle for any other.

Warren Buffett doesn’t play the CEO role. He has made his billions by making wise investment decisions about how his company, Berkshire Hathaway, invests its assets. That’ a very valuable role you can play for your Stage Four business–helping to increase its future value by guiding its most important investment decisions. As adviser, you (and your partner, if you are lucky enough to have one ) will be able to provide enormous value to your Stage Four business while working only a few hours a week.

My experiences prove that you don’t need a preponderance of natural skills to start or grow a successful business. What you need is a little knowledge and a handful of tricks. The knowledge has to do with what problems, challenges, and opportunities you must pay attention to at any given moment in your can use to overcome these problems, meet those challenges, and take advantage of the opportunities.

The key to being successful with start-ups is having a good general idea of what you want to do but being flexible enough to change plans quickly as you want to do but being flexible enough to change plans quickly as you discover the invisible secrets of market you’ve jumped into.

Getting a business to Stage Three, in which revenue goes beyond $10 million and approaches $50 million, is a great accomplishment. Most entrepreneurs never even get close to this level. But it’s not a time to rest on your laurels. The secret to growing your business to $100 million and beyond is to make joint-venture with entrepreneurs, and to develop superstar employees into entrepreneurs and then let them run your business.

Ready, Fire, Aim means disregarding most of the obstacles and detours that waylay others. It means finding and following the fastest path to any objective you set for yourself so that time and all the problems time brings with it won’t defeat you. Ready, Fire, Aim achieves more in less time because it puts the correct value on action. It is also a realistic approach, because it acknowledges human imperfection and failure in an intelligent way. In effect, Ready, Fire, Aim is a way of increasing the success you have in just about anything. Make a plan, today, to begin doing what you need to do as soon possible. In most cases, you will be able to begin today.

–Michael Masterson