"Small Giants" the book by Bo Burlingham presents a concept that resonates well with small business owners. His premise is you don’t have to be big to be great. I agree.

In the companies that Mr. Burlingham highlights in his book, most chose to ‘manage’ their growth and stay a certain size that was comfortable for many reasons and as the book points out, those reasons didn’t come easily or without a lot of contemplation and even pain. Sometimes, the choice they made ultimately was forced on them because of outside influences.

The key concept here is in the choice that the owner of the company made consciously, practically every day, as the company was, in fact growing. As I read the stories about the 14 companies that Mr. Burlingham selected, I was struck by one thing: the owner’s of the company’s each brought an Attitude of Growth to their company. To say it differently: these owner’s spent time actually THINKING about their business.

This book is a great read because you get to go into the minds of these owners and really understand their thought process as they wrestled with all the same issues you and I, as business owners, struggle with daily. My experience with other business owners, as well as my own personal experience as I work to create my third business, is that we just simply don’t THINK enough. We simply DO.

I have started to take 2 hours out of every day and literally sit and simply THINK about what I’m doing, why I’m doing it, what needs to be done, how I spend my time and ask and explore the question: am I staying true to my vision?

If you consciously take on an attitude about growth, you will be able to manage it. If you allow growth to simply pull you one way today and another way tomorrow, you’ll spin your wheels, squander your resources and become one of those 80% companies — you know the ones I’m talking about — the ones that go away and never become a successful company.

Years ago I woke up in the middle of the night, grabbed a piece of paper and pen and wrote down 10 items that literally popped into my head in answer to the question: what made a company successful?

The company I had just left had done many things right in the 14 years that I was there as partner and President, but there were also many areas that we had missed. The items that popped into my head came from somewhere and I knew I needed to capture them and then do something with them to help other companies break through their own growth obstacles.

Since that day, over 7 years ago, I’ve learned a lot more about how companies can successfully manage their growth. Here are the 10 items that I believe have to be a part of a business owners Attitude of Growth. When I have time, I’d love to see if these 10 items show up in the examples given in "Small Giants".

#1:  Articulate a focused vision/mission.
#2:  Define your values.
#3:  HIre a capable management team.
#4:  Identify your issues for your stage of growth.
#5:  Know the numbers.
#6:  Create a strong sense of customer success.
#7:  Design a system for employee communication.
#8:  Understand and protect the culture.
#9:  Insist on management training.
#10. Become fanatic about employee care.

Over the next several months, I’ll talk about each one on my blog. I never hesitate to bring any one of the 10 into play with my clients. All I think are important. But depending on your stage of growth, some are more critical than others. Hopefully, something may resonate with you as you THINK about your business. The order of these aren’t important. But I do believe all of them must be a functional aspect of growing a business.

I highly recommend "Small Giants". The stories are motivating and realistic and allow all of us a chance to look at the human side of business.

Remember, you make choices everyday when running your business. Make sure those choices line up with your ultimate vision of where you want your business to go.

By Laurie Taylor
As seen in Colorado Biz Magazine

“I’ve NEVER had anyone talk to me the way you just did!”

That was the comment I received after telling one of my CEO clients that his behavior the other day was unacceptable.

My answer was simply this: “Did you HEAR me?”

Apparently he did. At our weekly staff meeting the next day he apologized to his staff.

I do not like getting angry with a client. Since I make my living getting hired by CEOs to help them manage their businesses, anger is not an attribute I find attractive and certainly not an attribute I would say is good for business.

The challenge in this incident was the CEO had stepped across a behavior line that I personally could not accept. I cared too much for him and his staff.

This CEO had met recently with a client who said he (the client) knew that this CEOs staff was spreading rumors about his business and he expected this CEO to do something about it.

Noticeably angry and upset, this CEO called a meeting the next day with his staff and accused them of spreading these rumors. When the staff protested, he said they were all lying to him. He didn’t give anyone an opportunity to explain their side of the situation and he didn’t engage them in a conversation that encouraged dialogue to get to the bottom of these very inflammatory accusations.

He assumed his staff was wrong and a client was right. Before I go on, know that I’m not a proponent of the theory that the customer is always right. The customer deserves respect and to be listened to, but they are not always right.

I know human nature can expose volatile behavior when pushed. This CEO is under some severe pressure right now. But simply because someone is ‘in charge’ and they are having a difficult time does not excuse bad behavior. Period.

Needless to say, this small team was devastated. One person has only been on board for a few months. This is a team who hasn’t had a lot of direction, very little management and scattered communication because their leader has not been focused on running his business. His focus is elsewhere. He brought me on board to provide some managerial direction for him and his team, define roles and responsibilities, create a more sound structure and improve revenues.

When I sign on to work with someone, there’s a caveat that reads ‘In order to reach the goals set out, it may require specific behavior changes from everyone.’ I always include that in my agreements because in nine out of ten situations when dealing with people, there is an issue with behaviors. And if someone isn’t willing to change or adjust their behaviors, it’s difficult to make progress.

I had worked with this small crew for over nine months. They had just brought on a new addition to the team to fill a huge hole in the capabilities arena. The team had had some difficult adjustments, as teams do. However, roles and responsibilities were clear, action lists were being submitted and monitored weekly, processes were in place and being followed, we had decided upon a defined set of values (to guide behaviors) and revenues were picking up.

Throughout this time frame, the CEO continue to fall back on old habits of making assumptions, instead of outlining expectations; wishing certain things would change without communicating what those changes should be; expecting that each person held his same work habits instead of understanding strengths of his team; and finally, assuming bad outcomes first before looking at areas of improvement.

As much progress as had been made, it simply wasn’t good enough. As much as I worked to help him see the positive, it was a continual struggle. Staff morale was low. With the addition of the newest employee, there had been more camaraderie but it was difficult to maintain because the leader simply brought the energy level down. The accusation that the staff was lying, almost broke their spirit.

I watched it happen and I couldn’t ignore it. That’s what brought on the heated discussion that transpired between me and my client.

The point is this. Bad behavior just doesn’t solve anything. If you are going to hire employees, step up to the plate.

There has been a ton of research and writings over the past two decades on leadership – a summation of all that work could boil down to ‘communicate expectations, adjust behaviors when needed, be there to provide support and encouragement,’ A recent study from researchers at Florida State University reports that “Workers with unsupportive supervisors are twice as likely to feel sad and helpless.” How horrible to go to work everyday and feel sad and helpless.

Got a question for you Mr. or Ms. Manager: Do you think you have employees who are feeling sad and helpless?

Too many managers, leaders, or supervisors who have the responsibility of employees make the managing of those employees way too hard. In this case, my client could have easily sat down with his staff and explained what he had heard. He could have solicited their engagement in solving a very real and concerning problem. Instead he felt he had to blame. Results: No one won and the impact of that horrible day will be felt for months to come.

I’m not saying you can’t be a strong leader or you can’t expect a high level of continuous and productive work every day from each and every person you hire. You have to expect results. But at the same time, if you aren’t getting them, and you are in charge – look in the mirror before you place blame.

Laurie Taylor is a small business expert and President of FlashPoint! Laurie works with business owners, with fewer than 500 employees in three areas: understanding how you make and keep money, understanding how to manage growth and understanding how to engage employees and improve productivity. Visit her website at www.igniteyourbiz.com.

Focus on These Critical Challenges
You aren’t sure when it happened. But without really being cognizant of it, you have 14 employees. Fourteen people who now rely on you to ‘bring home the bacon’ so they can fry it up at home.

Ouch. You knew things were getting more difficult to manage. It was getting harder and harder to keep up with the flow of work. Your employees were sending you ‘not so subtle’ messages that unless you did something soon to ease their pain, it was you they might be ‘frying’.

You are now the proud owner of a Stage 2 company with between 11 – 19 employees. You just experienced what we refer to as a Flood Zone, one of two ‘chaos zones’ that companies move through as they grow. A Flood Zone requires you to bear up to an increase in the quantity of activity. Your first reaction to a Flood Zone is to add more people. Don’t.

Instead, as you Ramp Up in Stage 2, you need to be focused on Profit/Revenue, getting critical processes in place and avoid the trap of just ‘throwing people at your problems’.
This mistake alone has accounted for too many businesses imploding too soon. There are five critical challenges you face as a Stage 2 leader. In talking to leaders who have made it to Stage 2, they are almost completely overwhelmed.

You probably haven’t spent time thinking about ‘managers’ or shifting the responsibility of managing these 14 people – you are not only trying to keep them on target with projects, but you are still doing everything you’ve been doing since you started your business.

Based on the research we have done, getting focused on five areas of your company will help. I know. You have more than five things you have to worry about.  I get that.  I’d just offer up this approach to the following five top challenges of a Stage 2 leader.

When you get out of bed every morning, spend time organizing your day around these five activities. Make the commitment that you will address each one, at some level, every day.

Challenge #1:  Hiring Quality People. But, Laurie, you just said: Don’t throw people at your problems! I’m not asking you to hire more people, I’m asking you to hire quality people. My guess is you have one or two people on your staff right now that the company has outgrown. They are good people but the company has moved on and they haven’t. Let them go and hire someone you can begin delegating specific tasks to.

Challenge #2:  Improve Sales. You are no longer in survival mode. You have moved into growth mode. That’s why generating revenue through sales is so critical. Follow the money. Enough said.

Challenge #3: Manage Cash Flow. Track it daily if necessary but no less than weekly. Don’t let your expenses get ahead of you. When thinking about spending money on something, take time and ‘inquire’ as to the WHY of your decision. Ninety percent of CEOs think they make good decisions – 60% of them are a bust. This isn’t time to squander resources.

Challenge #4: Recognize the Leadership/Staff Gap.  If you aren’t talking to your staff, individually, on a weekly basis – and I mean having a dialogue about how they are doing, what they need, how you can help them – you are looking at the beginnings of a communication chasm that you won’t be able to bridge. Start talking now – payoff is in spades.

Challenge #5: Limited Capital to Grow. This is a challenge that has dogged you potentially since day one. It is reality for companies in Stage 1 and Stage 2 who haven’t received venture funds. Have you looked at your business model? Do you have a model that creates a recurring revenue stream? Passive income? Have you recently evaluated your pricing model? Don’t get complacent. Worse, don’t spend all your time working IN your business. Intentionally think about your business.
Congrats on making it to Stage 2!

“If you really put a small value upon yourself, rest assured that the world will not raise your price.”  Anonymous

Determining what to charge for your service or product isn’t easy. Most business owners simply take a guess at what they think someone will pay. By doing this, you are already setting yourself up to fail.

As consumers, we interact with the psychology of Price every day. We are programmed to believe that if we pay MORE for something, it must be better. Brand plays a role in this perception. We will accept paying $60,000 for a BMW but wouldn’t think about paying that for a Ford Escape. So the price of your service or product carries with it a great psychological impact. When you pay more, you expect more.

Find out how to determine the optimum price for your product or service.

Your optimum price is the one that affords you the most sales at the greatest profit. Determining this price is a five-step process:

1. Figure out your minimum price.  No matter what it is you are selling, you have to determine what your costs are to produce that product or service. So many solo-preneurs provide a service that starts and ends with them spending their own time delivering that service. However, the mistake many make is they don’t ‘value’ their time so they don’t include it in the cost of producing that service. If you are selling an e-book and the only costs you capture in determining the price for that e-book is getting it set up to be downloaded from your website and you ignore the time it took you to produce that e-book, you will under price it. Be diligent about capturing all the costs involved in producing your product or service so you understand the minimum price you must ask for that product or service. Anything less and you lose money. Anything more is profit.

2. What is the focus of your brand? At some level, every business has a brand. Chances are you may not be a Microsoft or Pepsi, but there is a perception about your product or service out there and you need to be intentional when thinking how you want to be perceived. Are you the gourmet, boutique market or the produce warehouse? If you have a gourmet approach to your service or product you can charge more but as a produce warehouse you will sell more. You can sell a lot for less at a lower profit, less for a lot at a higher profit, or something in the middle. When you are very clear about the value your service or product provides, and you are conscious about explaining that value to your prospects, you are establishing brand perception.

3. Analyze your competitors. As consumers we are price conscious but it’s not the only reason we buy. You absolutely need to know what your competitors are charging. You need to know so you know how to position yourself in your market. You can certainly undercut your competitor or you can match them while offering different benefits that raise your perceived value in a potential customer’s mind. Be realistic when comparing your service or product to a competitors. Is yours superior or inferior or similar? Which of your competitors is doing the best? Is it because of price or something else?

4. Set a price.  If you know the minimum you must charge, you know what your competitors charge and you know what brand image you are trying to establish, set a price.

5. Test, Test, Test.  Don’t think that your first price needs to be your last price. Tinker with it. Try it out. Try it out in different markets. Set different prices when considering your marketing mix (direct mail, website, advertising, public relations) to see how people respond. You may send out a direct mail piece in October to one set of prospects and at the same time, put it on your website in November at a different price. See which one gets the best response.

Even small business owners who have been in business for a long time should occasionally test new prices for existing products.

Product and service pricing is part art, part skill and all perception. A person will pay you the price you set for your product or service if they perceive it is worth that price. And this requires that you know your product or service’s Value Proposition or the reason someone would want what you provide.

How to Take the Guesswork Out of Growing Your Business

The honeymoon is over. You have your start up capital, you ramped up to 4 – 6 employees pretty quickly and now the fun begins.

Getting out of the gate with a new company isn’t easy but it’s a cake walk compared to creating a consistently profitable business that you can run and not have it run you.
I talk to business owners every day. They are struggling to keep their focus on the constant barrage of issues they have to deal with in a fast-growing enterprise. Their companies have quickly grown beyond the owners’ ability to manage everything.

That happens, by the way, as soon as you start adding full time employee to the mix.

In a nine year research study by Origin Institute, a research, consulting company out of Boulder, CO, of entrepreneurial companies along the Front Range of Colorado and California’s Silicon Valley, the trigger to growth trauma wasn’t brought on by an increase in revenue/sales or profits. It was brought on by an increase in the number of people in a company.

Intuitively, business owners know when growth trauma is occurring. I knew it as I grew a company from 2 employees to over 100 employees. I recognized the signs of growth impact early on in our company’s life cycle when we watched profits dip, customer satisfaction decline, morale issues surface.
What I didn’t understand were the exact reasons for the decline. I did have a general belief that it was more difficult to keep pace with the requirements the additional staff demanded and the feeling that what we did last week no longer worked this week.

Wish I knew then what I know now.

The complexity of any organization is increased because of the number of people, not the amount of revenue, you have. Money and processes are easy to manage compared to the dynamic impact that people bring to the table.

The 7 Stages of Growth entrepreneurial research study turned into an enterprise development model that I use daily in my executive training programs with business owners.
This model helps business owners get ahead of growth issues, actually allows them to predict growth impact and helps them understand what they have to do to manage their company as they add more people.
A Stage One company, (there are 7 Stages that cover companies up to 350 employees) or Start Up, has 1 – 10 employees.

A Stage One company is CEO centric – meaning the CEO is likely the ‘specialist’ who has created a product or service and is now getting her idea to take shape. Therefore, 50% of your time should be spent as the technician or the specialist while only 10% of your time will be spent as a manager.

As a company grows, so must the leader. Each stage of growth will require something different from the leader. Understanding what is required of you as your company evolves can either propel the company forward or cause the company to become ‘stuck’ – profits never materialize; sales suffer; there is high employee turnover.

The Five Non-Negotiable Leadership Rules for a Stage One company:

1. You must generate, track and preserve cash
2. You must focus 80% of your resources on selling the 2 – 3 offerings with the best margins
3. You must hire for ‘how the person fits in with the team’ first and second, for how competent they are
4. Waste no time trying to ‘stabilize’ your company – embrace chaos – command the team and inspire the employees
5. Establish regular one-on-one meetings with each employee designed to build a company-wide performance mindset, feedback loop and employee development

Survival is the name of the game in a Stage One company. As you grow closer to Stage Two (10 – 19 employees) it shifts to being about growth. Stage Two is about supporting higher sales levels and making a profit.

The bottom line in understanding the 7 Stages of Growth that all companies go through is that the complexity of an organization will always extract its due.

Next installment: Explore the 5 top challenges for a Stage Two company with 11 – 19 employees.