Stage 1 – Start Up : 1-10 employees

How to Take the Guesswork out of Growing Your Business

A Stage 1 company, or Start Up, has 1 – 10 employees and is CEO centric. This means that you, the CEO, are likely the “specialist” who has created a product or service and are now getting your idea to take shape. Therefore, 50% of your time should be spent as the technician or the specialist while only 10% of your time should be spent as a manager.

The Top 5 Challenges you will face in Stage 1 include:

  1. Continual cash flow challenges.
  2. Chaotic periods destabilize the company.
  3. Too slow developing new products/services, and getting them to the market.
  4. Limited capital available to grow.
  5. There is a challenge in expanding sales or production.

As your company grows, so must you as 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.
Survival is the name of the game in a Stage 1 company. As you grow closer to Stage 2 (10 – 19 employees) it shifts to being about growth. Stage 2 is about supporting higher sales levels and making a profit.

The Five Non-Negotiable Leadership Rules for a Stage 1 company are:

  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

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. Being able to anticipate what is coming next is the real value in understanding each stage of a company’s growth.

All of ACT One’s programs are designed to focus on your stage of growth. If you are a Stage 1 company, we can provide you with the top five challenges for your stage of growth. We can get you focused on the “rules of the road” for a company with 1 – 10 employees. And we can help you get ready for the day you add that next employee that launches you into the next stage of growth.

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