Getting Your Business to that Elusive ‘Next Level’
When you’re in school they make it pretty clear what it takes for you to move up to the next grade: do your homework, pass your finals and maintain a certain grade point average, and off you go. Out in the workplace, it gets a little harder, but in most companies you can also find a rough road map on how to move up, what the next level is in terms of job titles and what you need to do to get there.
Alas, when it comes to running or owning a business, it ain’t so easy, which is why the most common complaint I hear from other business owners is about their inability to get to that elusive “next level”.
The first question I ask in response is, “describe what that next level looks like to you,” and you’d be surprised at how often that actually stumps people. But it’s really important, because without knowing where you want to go, how will you know if you get there? It’s like the old bicycle analogy: you can pedal as hard as you want on the back tire, but if the front tire is pointed in the wrong direction, you’re lost.
The “next level”, of course, means different things to different people. Invariably, many answers include financial metrics such as increasing sales, increasing profits, improving margins, etc., or customer metrics such as landing bigger clients, or more high profile clients, etc. Getting there, involves two exercises: a road-map exercise, and a skills assessment exercise.
Road Map Exercise
- The 1st step is to hone in on these factors, and attach some numerical and qualitative goals to each, so we know what that next level looks like. Let’s say your event company has been at $1 million in sales for several years, and you want to get to $2 million.
- Next we would break this down. Let’s say your $1 million business comes from doing 40 events at $25,000 each. To get to $2 million, you can either look to double the number of events (e.g. 80 events x $25k ea.); or double the size of each event (e.g. 40 events x $50k ea.), or some combination of both.
- So what does your company need to look like to service that kind of income. For example, from an execution standpoint, if the answer to #2 is to double the number of projects, we’d probably need to add account managers/event planners, or perhaps hire more assistants to support the ones you already have. If the answer was instead to double the size of your projects, we might explore adding additional services to offer clients, or having planners with deeper skill sets to service these bigger clients. The point is to visualize your company at this next level, then reverse-engineer a plan for getting there.
- This is an over-simplification of course, and only focuses on the execution aspect. You’d have to extend this exercise into marketing, finance, management and other areas, figure out how fast you can afford to grow, etc.
Skills Assessment Exercise
Even if you can create a clear road map for getting to the next level in the above exercise, however, that doesn’t mean you’ll be able to lead your business there. The reason is that the skills required to start up a business are different from the skills needed to take an existing business to its second level. And those skills are different from the skills needed to take a company to its third level, sell the company, take it public, etc. At each phase the game changes, and the skills needed to excel change with it. Much like a reptile sheds its skin as it grows, so a business needs a new infrastructure when it grows.
This is probably the single biggest reason companies struggle to get to the next level. They assume simply doing more of the same, or doing it faster or bigger, will yield the desired results. Big leaps forward, however, usually require substantial changes in how you operate.
For example, a $25,000 event usually has no written RFP. The specs are delivered verbally, and your proposal can be done on Word. To go after a$500,000 event, on the other hand, you’ll need to plow through a 20 page RFP and your proposal will likely need custom illustrations, professional quality copy writing, graphic design and possibly animations in order to win the job. The event budget alone will take at least 10 hours to put together, and you’ll likely be asked for your company’s sustainability policy, detailed bios on your staff, an org chart of your production team, etc. Plus, the selling process takes a while to even generate the RFP in the first place. And there’s a good chance you’ll need to upgrade to a higher level of staff in order to land and produce an event of this caliber.
If it seems like a big investment is needed to get to the next level in this example, well, that’s because it probably is. But at least now you know you can’t get there by simply “pushing harder” within your existing framework.