The Deconstruction of Scaling a Business
Scaling a Business
Sustainability Case Study
The company starts with one person (the founder and CEO). Like any company, it was founded upon the solution for an unsolved problem that they want solved in the marketplace.
As the founding of the company, the CEO is doing all of the roles to run and maintain the operations: accounting, marketing, sales, production, etc. They begin seeing sales coming in and begin to have a steady revenue stream. It begins to plateau and stay in the same range.
Hiring the First Employee
The CEO wants to scale their company, so they bring in a person full time to take over the marketing and communications. Now, the founder has delegated work off of their plate onto a new person. This person costs money to pay for a full time job, but the goal being that this person will dedicate more intentional time to bringing in more customers (rather than the founder doing 4 other roles).
When bringing on a new employee, the hope is to have this person’s work have a return on the investment of hiring them. This allows the founder to dedicate more time to the other roles they are responsible for and create more streamline systems for the company.
Account Manager
Sales begin to increase, as more people are aware of the company. Due to a strong marketing plan, potential customers (leads) are coming in regularly. Their sales pipeline is growing, which is increasing the need for an account manager to assist with onboarding new customers to their company and maintaining strong customer service once they are onboarded. Onboarding means the action or process of integrating a new employee into an organization or familiarizing a new customer or client with one's products or services (Oxford Languages).
The new account manager begins streamlining the onboarding process and creating systems that are smooth for the customer but less work for the company. As a company begins to scale, the goal is to create sustainable systems that reduce workload but increase productivity and revenue.
The smooth sales and onboarding process is turning over leads from prospects to customers faster allowing for more customers to join the company, which is now leading to an increase in revenue that outweighs the cost of the two employees the founder hired.
Sales Representative
The CEO has two strong employees that are exponentially growing revenue for the company. Cash flow is steady and the company is ready to bring on another employee. Leads are flowing in and new customers are turning over quickly. The onboarding process is smooth but now it’s time to nurture the sales pipeline and take it to the next level. The CEO decides to hire a sales representative, who will be in charge of direct sales and converting leads into customers.
These leads are people who inquire about the product or service the company offers. This person’s job is being a point of contact for new leads and will be readily available to talk.
Have you ever called a business and no one answered or emailed you back, so you just move on to another option? This is money that is being lost. Having a point person who answers questions and nurtures these relationships, results in more conversion into paying customers.
Finance and Accounting
The CEO managed finance until the other positions were filled and growing the company’s revenue. This helped them stay on top of money coming in and money going out. However, now that the new employees are operating smoothly and outputting more work than could be done by one person, there is a strong return on investment. Processes are being streamlined and are more efficient. This is causing employees to spend less time on projects and more time into new projects that bring in more revenue.
This allows the CEO to hire someone to be solely responsible for finances and bookkeeping. The main roles have now been filled within the company. The CEO has time to manage their employees and create big picture visions for the company.
Scaling Sustainably
As the revenue became available, they expanded the staff by priority of need. The CEO slowly added positions that would add value to the company. Each of these roles discussed above were brought in with the purpose of creating more efficiency and to bring in more revenue through dedicated marketing and sales strategies.
When scaling a company, the goal needs to be creating efficient processes that will reduce workload in certain areas to allow for growth in new areas. The hope being, that net revenue will grow while expenses stay in the same range.
The CEO’s role is now creating more efficient processes for their employees, thinking on how to bring in new revenue streams, and general company strategy on expanding and improving.