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The Ugly Truth About Business Tipping Points
18 Sep 2017

The Ugly Truth About Business Tipping Points

Are you thinking about starting your own business? Perhaps you’ve already started it and are beginning to already see the reality I am going to talk about today. The fact is that every business, at least that I’ve encountered, no matter what industry, how big or how small, faces a pivotal tipping point. It is the point at which you are busier than you’ve ever been, but you are going to have to kick it up a gear to earn enough money to bring another person or people on to help.

We have had meetings with manufacturers who have this problem. They are making millions of dollars, and all hands are as busy as they can be. However, the company cannot make enough to move up to the next level of profit objectives. More people need to be hired to do the work, but there aren’t enough billings to allow for hiring more people.

I have seen this problem with two-person “mom and pop” businesses, too. The tipping point for them tends to come earlier. When a business launches, it’s going to be about as popular as it will be for a long while. That means that right out of the gate, the demand is going to be challenging, but a new business won’t have enough money right away to hire a person to help carry the weight. There is no guarantee the demand will continue. There’s no reason to hire a person for three weeks, right?

I have not yet encountered a business who had a great solution for this pickle. It’s a “chicken and the egg” kind of conundrum. How can you hire more workers when you need more money, but how can you make more money when you need more workers? The conclusion usually is that everyone needs to work at a pace they are not comfortable with in the hopes that things will click, profits will increase, and a new flow will allow for new people to be added. It’s a tremendous gamble, and it can truly take a toll on all who are involved.

How can you endure this stage of a business’s life if it can’t be avoided? Perhaps that is a better question to focus on, because I think all businesses reach that magical point where things will either get easier or stay hard for a very long time. Here are some ideas.

  • Owners/Entrepreneurs – remember that Rome was not built in a day. The desire to push yourself to get to that magical profit point where you can hire help must not take priority over taking care of yourself. You will not work effectively if you are sleep deprived, surviving on Red Bull and pixie sticks, etc. Leave time to exercise, relax, have good meals, and SLEEP. Entrepreneurs don’t like to admit that they sleep because sleep seems to be anti-hustle, but the truth is you will burn out if you do not take care of yourself first.
  • Be generous with praise when dealing with your employees – You know in your head and in your heart that you are asking a lot of them. There is probably some gurgling resentment. Working more hours with no pay increase, for example, usually does not make people happy. Show them that you are observing their efforts and their sacrifices. It doesn’t pay the bills, but if everyone feels like they’re working on something together, it can be motivational and comforting.
  • Employees – be good to each other. It can be extremely easy to get snippy with each other because EVERYONE is under intense pressure. Crankiness often begets crankiness, as we all know. Bear in mind everyone is in the same boat. Be a little less picky and a little more patient with each other.
  • Set attainable objectives so everyone can feel like they’re making progress – Ultimately, let’s say your goal is to increase sales by 15%. That would take you to the point where you would be able to hire x more people, and things would get easier for everybody. Well, that’s a hefty task, and it certainly is not going to happen overnight. Instead of letting that huge goal hover over everyone’s heads, try to break it up into weekly or monthly goals that people can strive for and see if they hit. Maybe you try for one new customer a month, or an increase in productivity, or both. Be sure everyone knows most especially when goals are reached. Beating one hurdle makes the ones to come seem easier.

Getting a business to that next level is hard. There is just no way around it. It requires commitment, dedication, and a huge investment of time and effort. Before starting a business, be sure you are ready to tread water for awhile, financially, psychologically, and spiritually. Business can be discouraging at times like these. Take consolation in the fact that everyone has to go through what you’re going through. You can do it. Accumulate small victories and they will take you to the big one you’re after.

Want help? Just give us a call or drop us an email.

Image credit: https://www.flickr.com/photos/mattcornock/13518486424/ via Creative Commons

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