One of the things about most small businesses, especially successful ones, is they get complacent over time. In a company, people work really hard for 10 or 20 or 30 years, and they finally achieve lift off, and they grow from being a marginal, barely profitable, sort of subsistence family business, at say five million in sales, and they jump up to 25 million in sales. Or they go from 25 to 100, or something like that, and they say “Phew, that was hard. But now we’ve made it. We don’t need to make any changes anymore, and we’re so smart and gifted, and look at how successful we are. Why would we need to change anything?”
Instead, think of the Three-and-Ten Rule. If you grow three times, if you go from one million to three million, etc, 3x is a big indicator. At 3x, you need to blow up everything, blow up all your systems – your sales systems, your HR systems, your operations systems, you need to blow it up and start all over again and reinvent it. And do the same thing in multiples of 10 (so 10, 100, etc.), even if it’s number of people you have from 10 employees to 100 employees.
So, the three rule and the ten rule. And at that point, you need to kind of just plan on blowing up all your systems, because they’re not going to work anymore. And that’s the problem with small businesses that have gotten complacent. They cling to those old systems and they say, “Look. This is why we’re successful. Why would give up anything that helped us get where we are?” And what I’m gonna tell you is this: At some point, you do need to abandon those old systems. You can never, ever be complacent as a business owner. If you get complacent, your family business can wither and die over just a few short years.
And so, complacency is the battle. If you find yourself getting complacent, if you see people around you getting complacent and going through the motions, you really have to take a hard look and see if you’ve come up on that 3x or that multiple of ten. And if you have, you really have to start thinking about how you are going to make changes to avoid complacency. You have to figure out what you can do to replicate the growth and the prosperity that you’ve had, so you can continue it for another generation or two in your company.