How many people are on your team? How big are you?
This is one of the most frequent questions entrepreneurs will ask each other when they meet. The other common line of inquiry is about how much the business makes.
Headcount and revenue are two indicators we use to get an idea of how successful a business is. Perhaps because of this, we intuitively focus on these two measures when we think about growth. However, they’re not great representations of success. Both can be impressive while the business is burning to the ground.
Most entrepreneurs want to grow, but it’s worth considering what and how you want to grow. Doing so often creates faster paths to growth.
For example, I’m shrinking my involvement in the agency I run. I’m currently available to my team three days a week and transitioning to two days a week. It’s not intuitive, but this is actually a form of growth. Why is that?
Growth is an expansion in capability or capacity. In my case, what we’re working on is expanding my team’s capability to work without me.
This isn’t a Jedi mind trick to reinterpret growth to make it easier to achieve. A business that requires less to produce the same is a more profitable business. And a business that doesn’t require an owner-operator is a more valuable business. By reducing my team’s reliance on me, the result of this kind of growth is an increase in profitability and business value. Similarly, it would represent significant growth if you were a freelancer and you figured out how to get your week’s work done in a single day.
Understanding this opens up more options to grow. If your only road to growth is hiring more people and acquiring more customers your ability to grow will be dictated by the difficulty of accessing them in the market. When you know that what you’re really doing is increasing capability or capacity, doors to reach this appear within the business.
Beyond being impressive in conversation, what are you really trying to improve? How might you expand capability or capacity to do that?