Staff Size Inflection Points For Small Business

SIZE MATTERS

In the beginning your business was just you and an idea.

If you’re lucky.

It was just you, an idea, and few of your friends.

But then along the journey of your business something happened.

We’ll call that success.

And so your business grew.

In revenue, experience and people.

STAFF MATTERS

A natural progression of any growing business is adding staff.

To be more specific.

Adding the right staff.

But that topic is for another day.

As your company grows and staff is added dynamics change and things quickly become well…

Not as they were before.

And that’s because there are inflection points as your company grows in size.

Knowing what the inflection points are, when they happen, and how to deal with them can help make all the difference as you grow your small business.

Here are the growth inflection points.

When they happen.

And how to manage through them.

Generally speaking of course.

5, 10, 30, 50, 80, 100.

5 PEEPS

At 5 people you’ve got a real business.

You’ve begun breaking out some functions.

And you’re likely still the center of the universe.

As in—all decisions must go through you.

From a staff size perspective.

You’ve reached a span of control point.

And you might be starting to burn out.

It’s hard doing everything all of the time.

If you don’t have a number 1 in your business.

You should identify who that person is.

And begin sharing your workload.

10 PEEPS

Once you reach 10 people you’re at a good point to make a move.

If you’re business is running efficiently and revenue and margins are good there’s an opportunity.

But 10 people to manage is twice as many as 5 and things can start to get a little out of control.

Managing 10 people by yourself and running your business is not a doable thing.

Even though a lot of business owners do this.

It still doesn’t make it right.

At 10 people you have a decent payroll to output every month.

You can’t keep an eye on everyone and so things start shifting.

One on one communication is decreased.

If you’re fortunate enough to reach 10 people you’re at a point where you need a good partner.

Figure out what’s best for your business.

30 PEOPLE

At this point the peeps become people.

You’ve got human capital issues.

And at 30 people your business needs leadership more than ever.

I’ve seen business with 30 people and 2 guys running the whole thing.

It’s usually a mess and both guys are usually working non-stop to keep things going.

30 people is a lot.

At this point in your business journey you should have enough experience to know how your business functions and how to best organize it.

This means setting up departments, groups or teams.

Whatever term works best for you.

Then selecting leaders to run those groups.

As a business owner your discussions should be around sales, operations, finance and tech.

Staff management and other items should be handled by your leaders.

Should you have oversight?

Yes.

But you need people who share your vision and can help you grow running the company with you.

50 PEOPLE

If the politics, communication breakdown and mistakes don’t make you pull your hair out—just wait until you get to 50 people.

At 50 people there will be employees you know very little about.

Questions like “who’s that guy?” or “what does he do here?” hopefully do not become the norm.

But they happen.

Healthcare becomes a thing.

Human Resources becomes a thing.

Having strong leadership will be required to make it past 50.

At 50 people you’ll need to have at least a handful of leaders in your organization.

If you’re business is growing you likely won’t be at 50 for too long.

One last tip when you get to 50 people.

If you haven’t already.

Take a hard look at your line of business application.

Now is the time to make the investment in apps and services to enable scalable growth.

Let go of preconceived notions about how things should work or how they have worked in the past.

At 50 your business is at a place most small business will never get to.

Aligning process, productivity and tech at this juncture can really pay off big time as you grow.

80 PEOPLE

80 people is a sweet spot.

At this point you should have the leadership, process, people and technology working to your benefit.

Your business has made a name for itself and has hopefully a strong brand.

But 80 people is a lot of people.

And with all the good comes a heapful of bad.

You’ll have HR issues.

You’ll have people that don’t get along.

You’ll have managers with agendas.

You’ll have rumors and factions.

At 80 people it’s time to get personal.

It’s time to spend time with people one on one and in group situations.

This is important for both ownership and leadership to do.

Finance and billing should run like clockwork.

Sales should be a finely tuned machine.

Your marketing should be on point.

But the most important aspect at this point in your journey are the people.

Not to say that they aren’t at 5, 10, 30 and 50.

Only that now, more than ever, investing your time into your people will make a huge impact on your business.

A common mistake is thinking that hiring a Human Resources manager will glue things together.

But that’s not a fix.

It can actually make things worse.

If there’s one thing to do at 80.

It’s to invest your time into your people.

100 People

Last but not least is 100 people.

If you made it this far good for you.

100 people feels a lot different then 80.

If you invested the time at 80 people 100 will feel less strange to you.

At 100 people there’s a distance that appears between staff.

You have people who work at your company that never interact.

You’ll have people who work at your company because it just a job.

At 100 people there are likely people who exist because of an inefficient process or legacy mindset that has become entrenched in your organization.

To manage through this inflection point it’s a good time to understand the people and their roles in your organization.

It’s important to understand why someone is there and what their contribution is.

This is not a witch hunt.

This is not hiring some productivity analyst.

It’s about the leadership and management in your company being honest what’s needed to run your business.

You may just find incremental gains by doing things a different way.

Or by automating.

Beyond 100 people?

We’ll that’s up to you.

Small Business America rarely gets above 50 people on staff.

Small and nimble.

That’s part of what makes business fun.

Hope this helps.