Insights

30 YEARS :: 30 LESSONS :: LESSON 5

JAN 19, 2023 - Trent Creative

How to Grow and Stay Successful

What are the signs that your company is growing?
You hire your first employee.
Your revenue is growing, and sales are pushing $400,000 plus annually.

Your plan is working. You have a successful brand that is not among the 90% that fail. You are in the black; you need to hire an employee, your revenues have increased, and you are ready to take your company to the next level. As you transition from being a solopreneur, be aware of the pitfalls.

Grow Strategically

Review your goals and business plan
Talk to your accountant
Don't borrow more than you can repay in a reasonable amount of time
Don't grow too fast
Access your client & employee communication health
Make sure you do your quarterly reviews with employees-I can't stress how important that is

I remember being in business for a few years, and my next business goal was to reach sales of $1M per year. My mentor said, "Do you know how much you will need to sell weekly to reach that goal?" I said, "No, I don't." She said, "$20,000 per week." That was a reality check. Remember that I would need to sell more; if I did reach $1M, I would need to hire an account executive, another designer, and another programmer. I decided to reaccess and revise my strategic plan.

I fell in love with the J. Peterman brand in the 1990s. It began as a catalog company and is a tail of what goes wrong when you grow too fast.

The J. Peterman Story:
John Peterman founded J. Peterman, a catalog clothing retailer, in 1987 on a trip back from Jackson Hole, Wyoming, with a duster coat he had purchased. He received so many compliments on the skin that he decided to take out an ad and see if he could sell them. He had discovered that certain clothes you wear could make you feel part of an exciting and interesting story. He had grown to 15 employees with $4.8 million in sales in just two years from that one duster coat. His brand and sales had exploded, and he began getting pressure to grow faster and to open brick-and-mortar retail stores. Therein started the demise of a powerful and successful brand.
He had even become a character on Seinfeld.

He grew too fast
He had to borrow lots of money–took on too much debt
He acquired facilities that were cost prohibitive
You are only as good as the people who work for you.
He hired managers and didn't install his philosophy, and they, in turn, didn't know how to communicate it to the new hires as the stores opened.

There are many stories of J. Peterman's decline and final bankruptcy. I like his statement about why he failed: "I should have trusted myself -- over anyone else -- and I should have known when to say no."
What is the takeaway? Don't grow for growth's sake. There are many times when sustainability and slow growth is the best option.