The 7 Deadly Sins of 7-figure Businesses
It’s an amazing accomplishment to build your business to a million in annual sales. There are only 700,000 businesses in the United States (among 27 million) that get to this point, according to our Small Business Market Survey. This is why I refer to businesses that reach this mark as elite businesses. The stage four, or seven-figure business, usually has 10–25 employees and generates $1 to $3 million per year in annual sales. And while everyone now lauds your success, there are some pesky sins that will knock you down or out if you don’t address them.
1. Failing to hire, train, and fire to your purpose, values, and mission. This sin is significant in stages two and three, but it becomes a cardinal sin at this stage. It is almost always committed among stage four businesses. The business owner’s network of employees is tapped out, so she’s hiring people she doesn’t know. If those new employees are not a fit, there’s big trouble brewing.
2. Failure to build a leadership team. As the business owner, you can’t have everyone reporting to you at this point. You need two or three managers who can lead teams to accomplish the goals of the company.
3. Lack of clear company goals. Speaking of leading people to achieve the goals of the company, those goals must be clear and present for everyone in the company. If they’re not, people with good intentions will waste their efforts.
4. No performance criteria for your people. With sales folks, it’s pretty easy to determine if the person is getting the job done. With other employees, it can be tough. Far too often, I see seven-figure business owners fail to clarify the primary responsibilities of each role. This is more than a job description; it’s a contract of the key responsibilities the employee must handle to keep his or her job.
5. Lack of automated processes. You can’t do it all manually at this point. You’ve got to have a way to automate the repetitive, routine processes that make your business go. There’s no area of the business where this is more critical than in sales and marketing.
6. The business owner grips too tightly. When the business owner doesn’t trust her people to do their jobs, the job falls back on the business owner’s shoulders. This diminishes the abilities of the staff and puts all the weight on the business owner, resulting in stagnation or decline of the business…not to mention the total overload of the business owner.
7. The business owner is selfish. A business owner who doesn’t share responsibility, co-create the company vision, or pay people fairly will see his business struggle or even die at this stage. The leader must recruit other leaders and employees who want to contribute meaningfully to the cause. When the business owner shares, the business thrives.
Sometimes hitting the seven-figure stage can feel like you’re the winner of a pie-eating contest where the prize is more pie. If you work to avoid these seven deadly sins, you can have your pie and eat it, too, to mix metaphors.
SBS Idea of the Day: Get clear on your company’s top three to five goals for the year. Involve your top people in establishing and clarifying the goals. Then get your people aligned to the achievement of those goals so that everyone is on the same page. This is hard work, but it makes all the difference. Get crystal clear on your goals.
Read the other posts in Clate’s Seven Deadly Sins series:
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