Scaling The Company As It Grows

Steven wants to know how Dave scaled his company as he grew in size.

QUESTION: Steven in Tennessee wants to know how Dave scaled his company as he grew in size.

ANSWER: I think the first two or three things you do in scaling are the hardest. In other words, going from 200 to 300 people and going from revenue that was represented by that to the revenue that’s represented now for us wasn’t that hard. It was harder going from two people to 10. When you get to 10, then you really don’t feel it again until about 50 from a personnel standpoint. When you hit 50 to 75, most companies need to start looking at HR people as staff people, and they need to start looking toward a CFO more than just a bookkeeper or controller. That generally represents certain levels of revenue as well.

The first two or three are really scary for a lot of reasons. Number one, it’s your first two or three. Number two, you don’t have a ton of money to make mistakes with. If you have three people and one of them is a doofus, you’ve got a 30% doofus problem. It’s a hard issue. If I have 300 and one of them is a screw-up, we don’t notice. We’ve got to notice. We’ll take care of business, but in terms of the effect on the business and the net effect on the business, it’s not there.

The early stages of scaling require the most emotional, financial and backbone energy of any part. Choose carefully. Whatever time you were going to spend interviewing, spend four times more. Take more time interviewing. Watch your ratio of revenue positions to support positions. Too many support positions equal overhead. You will go broke. Make sure you keep your revenue coming in along with that.