The stage three business has between four and 10 employees and is usually generating between $300,000 and $1 million in annual sales. Keap research has found there are 1.9 million of these “steady operations” in the United States alone. We call them steady operations not because everything is running smoothly, but because the constant, white-knuckled fight for daily survival is behind you. Sure, you have plenty of nervous times (“Will we make payroll?”). And yes, you’re still figuring out some things in your core business model—what exactly you offer, to whom and for how much money. But for the most part, you’ve found a business that actually works.
Despite the relatively stable feel of the steady operation, there are seven deadly sins that will stall the stage three business or even kill it.
1. Insufficient marketing budget. Most steady operations simply don’t invest enough in their marketing. You can’t learn what works and what doesn’t unless you commit a monthly dollar amount to marketing on a consistent basis. When you don’t do this, you have an on-again, off-again relationship with marketing and your sales come in fits and starts. You can’t get to a seven-figure business without establishing and committing to a generous marketing budget.
2. Failure to establish and document your sales and marketing process. By this stage of the game, you usually have a loose process for generating leads and converting those leads into customers. But until you document that process, it’s voodoo in the business owner’s head. You’ll get stuck in stage three, and perhaps fall back to stages one or two—or even go out of business, if you don’t establish and document your sales and marketing process.
3. No automated follow up. Follow up is the critical discipline that separates winners from losers in small business. But, the vast majority of businesses don’t do it. Which is why only about 5 percent of businesses ever get to $1 million in annual sales. If you don’t follow up, you’ll go out of business. If you don’t automate your follow up, you’ll be hard-pressed to get to a seven-figure business.
4. Failure to stick to your unique selling proposition (USP). Just like in stage two, as a stage three business you must stick to your USP and “find your niche.” There are riches in niches, so the saying goes. It’s true. Resist the temptation to be all things for all people. Stand out by differentiating yourself. Be the big fish in a small pond, and you’ll be on your way to a seven-figure business.
5. Failure to clarify who fits. If you’ve ever said, “I just can’t find good talent,” that’s one of the seven deadly sins of stage three. You are to blame. And I say that with respect and admiration for you. But YOU must make it clear what “good talent” means in your business. If you can’t find it, you haven’t clarified it. All you need to do is write down on a sheet of paper a few statements that clarify who you are, what you do, and why you exist.” We refer to this at Keap as your purpose, values, and mission. Write it down.
6. Hiring people who don’t fit. Once you articulate your purpose, values, and mission, you must hire, train, and fire to it. Simple as that.
7. Not firing people who don’t fit. If you don’t fire the people who don’t fit your purpose, values, and mission, your business will stagnate or die. As the leader of the company, once you have more than an employee or two, it is your number one job to clarify who you are, what you do, and why you exist as a company—and business is a lot more fun when you fill your company with people who fit.
SBS Idea of the Day: Read chapter two of “Beyond Entrepreneurship” by Jim Collins and then articulate your purpose, values, and mission.
Read the other posts in Clate’s Seven Deadly Sins series: