Growing a business from an idea to six, seven, or even eight figures is the dream of many, yet the reality of a select few. And no wonder, when there is no roadmap, no guideline, no way to know how to get from one stage of business growth to the next – without actually experiencing it yourself.
In this post, however, we are trying to do the next best thing. We’re bringing you wisdom from brothers Alastair Sanderson and Richard Sanderson, who started their first business in 2009 in Oxford, UK, and who today run offices on three continents and are about to break that elusive nine-figure barrier.
Here’s their take on the six stages of business growth:
Stage One – Bootstrapping
The one thing both Alastair and Richard Sanderson have to say about the bootstrapping phase is: get out of it as soon as possible.
No matter where the funding for your business is coming from, you want to move on to the next stage as quickly as possible. Don’t waste your energy and time on debating the smallest details (that can come later, when you’re making actual money).
As long as you have a viable minimal product, launch it, and make your first sale.
Stage Two – Post Revenue
Alastair Sanderson notes that this is a phase for many hats, where you’re constantly trying to learn on the job and develop your product or service further. This is also a time to outsource some of the tasks you don’t need to be doing yourself, and allocate your time and talent where it will be most useful.
Richard Sanderson advises keeping an eye on your cash flow. Make sure you don’t run out of stock and that you are able to cover your expenses for the time being.
Stage Three – $1 million
To break the $1 million per year mark, you will need to focus on hiring people, says Alastair Sanderson. A small business’s first hires are crucial, so you should aim to hire for attitude over skill. If you make the wrong hire at this stage, it can set you back significantly.
Hire people who can take the biggest load off your own hands. That will all depend on your line of work, but the goal should be freeing up as much time and headspace as possible, so that you can focus on growing the business instead of doing the work.
Stage Four – $10 million
Once you cross the $1 million mark, you will want to hit $10 million, says Richard Sanderson. However, the way you get there can be of crucial importance.
He advises trying to take your best products or services into new markets or down new sales channels, as opposed to creating new products or services.
This stage is all about scaling, and the Sanderson brothers advise going about it the smarter way: invest in what you already have going for you, and then build a new idea from the ground up.
Stage Five – $50 million
When aiming to cross the $50 million threshold, Alastair Sanderson emphasizes the importance of making a mental switch. You are no longer doing the kind of business you started out doing. And while the stakes are much higher now, things are also easier in many ways. Cash flow is no longer an issue, but focusing on growth can be.
He advises hiring a management team that will focus on the running of things and staying on top of your finances, so you can take your mind and keep it busy elsewhere. Making sure that this hire is a perfect match will take some time and effort, but it is essentially what can propel you to stage six.
Stage Six – $100 million
If you are looking to break what is often the largest barrier entrepreneurs set themselves, you are likely no longer in need of any advice, say the Sanderson brothers. You will be joining an elite club of business owners and the top 0.4% – so this is truly a time to enjoy the road and reap the rewards of all that hard work you have put in over the past decade or so.
To Sum It All up
According to Richard and Alastair Sanderson, making it through all the six stages of business growth comes down to making smart and timely decisions, working on your own skills and mindset, and adapting to your growing business. They also like to remind their fellow entrepreneurs to enjoy themselves – you don’t want to spend a decade of your life miserable, no matter what you expect to get out of it. If you’re interested in learning more about them visit their site at http://sandersonholdings.com