Stage 1: The Scramble
Stage 2: The Hustle
Stage 3: The Manager
Stage 4: The visionary
There are probably more, but this covers my thoughts right now...
Stage 1:
You are scrambling about trying to figure what works, why it works, and how to repeat it.
Key Goal: Idea Traction / Market Fit
Key Metric: # of customers handing over money
Key Risk: You aren't offering something compelling, wanted, or painful enough
Stage 2:
You figured out what works, now you are hustling to get more business, straddling between growing sales, and growing operations to support those sales.
Key Goal: Leads, Conversions, Unit Economics
Key Metric: CAC, B/E #'s, GM per key resource
Key Risk: Cash, People
Stage 3:
You've got enough labor to support a decent-sized, growing customer base. You are now out of time & energy and need to build a machine
Key Goal: System Development
Key Metric: Process Coverage %
Key Risk: incentives, documentation, quality
Stage 4:
Your business now runs day to day w/o you, need to work on where you are headed. What is the vision to drive the team, investments, decisions?
Key Goal: Engagement, Excitement, Contribution
Key Metric: Satisfaction & Fulfillment related #'s
Key Risk: Distraction
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Wealth building isn't really a gradual process, it happens in step-wise functions.
Because of this (and the way people are wired), modern portfolio theory is just that... a theory.
The strategy that will actually help you build wealth is a barbell approach.
Helping 10 people manage / invest 10mil+ right now and its the best for all of them.
People have a tendency towards risk, gambling, the large payoff.
Rather than constantly trying to educate and remove that innate tendency... use it as part of the investing strategy
Creating a safe portfolio, that always trends up over the long term, and has a small chance of declining, enables a riskier approach with the remaining funds.
This riskier approach should include asymmetric bets that will enable step-wise growth in wealth.
Procedures are enormously important if you want to
- scale the size of your business
- reduce mistakes and fires
- find operational leverage points
- outsource work
- reduce training time
- and create a streamlined operation.
But what should they contain?
1. Name
Every Procedure should have a name. Since these will be stored and referenced, I like to use the name of the task someone would be asked to do.
"Can you send invoices" -> Send Invoices
"Please ship this UPS" -> Ship UPS
This makes it searchable by those who are new.
2. Date Written
You should keep a date written and date updated on the procedure at all times.
This helps people know how current it is.
It gives you a way to identify and update (ex. all procedures over 12 months old need to be reviewed for accuracy).
Process improvement means
- it costs less to run your operation
- there are few mistakes
- it takes less time to run your business each day
- you can take on more customers without investing in more resources
For the business owner this means:
- more cash
- less stress and fires
- less time in the business
So how do you do it?
While there are countless complex and innovative ways to carry out process improvement, many small business owners can start to see significant improvement with just a little work.