The Rubber Band effect

I’ve often been asked about what happens as a business gains momentum and develops more sales. Every business, as it grows, will inevitably hit certain plateaus. The ability of a business to move forward off a plateau is based around the resources of the business getting stretched like a rubber band – tighter and tighter and tighter. Unless you as a business owner do something about this situation, that rubber band is going to snap. Now, that rubber band can snap back, smack you in the face and hurt – meaning that your company is going to contract back to a place where the resources of the company are comfortable meaning a lot of wasted effort and lost revenue, or it can snap forward driving the business off the plateau and on to greater revenue.

This kind rubber band effect happens at around $1 million dollars in sales it happens again around $3 million in sales again around $5 million in sales and so on. What you as a business owner have to be able to do…absolutely have to be able to do…is to take a hard look at the resources that you have at your disposal when those resources are stretched to their breaking point and make some very hard decisions.

These decisions may include completely reviewing your internal structure and staff. In many cases you may have to reengineer the way you do business to meet the growing demand. It may mean taking a hard look at your staff and evaluating their skill sets or looking at the tools that your staff has at their disposal. The right staff with the right skills and the right tools will take you forward. In my own business life, I did this every single time we hit that plateau and started seeing those resources get stretched. It’s not pretty – it’s not easy, but it is something that has to happen if you want that rubber band the spring forward rather than snap back in your face.

This is the essence of good business leadership – an intimate understanding of what your resources can do, and what they can’t do. Watch out for those plateaus and those stretched resources Make a deal with yourself to make sure that you do whatever is necessary to make sure that rubber band stretches and then snaps forward. Remember – if it snaps back you’re going to lose ground, lose business and that’s never good.

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