In the book, Billion Dollar Company: An entrepreneur’s guide to business models for high growth companies, Robert H. Hackers says:
“Many entrepreneurs hit a sales plateau somewhere between $3 million and $10 million. Many mistakenly then diversify into a new business or a new customer segment. The error in this approach is that all of the skills and market knowledge from the first business rarely transfer from the original business. These entrepreneurs effectively are beginning a new startup with all of the associated risks”.
Excellent point. It’s easy to lose focus during that challenging stage of your company’s life.
One of the other fascinating challenges you face in making it to (and past) the $10 million mark is transitioning from a bookkeeping approach/mindset to managing the financial side of your business to a more professional, insightful, and focused approach.
There is a world of difference between the two approaches and I have seen lots of companies wait until they were in a financial crisis before they made the transition (oftentimes because a lender or investor put a gun to their head and forced them to do it).
The smarter approach is to lay the foundation for a more seasoned approach to managing the accounting and financial side of your business now.
It will dramatically improve your odds of successfully growing your company and attracting the talent and capital you need to drive revenues higher and higher every year.
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