To 4-Profit there are three types of owners; life-style, growth and hyper-growth. Each of these types of owners brings its own drive and motivation. A life-style business owner owns a business to satisfy the needs of their life and family. Most of the profits of the business for a life-style owner are used to make the quality of their life as good as possible. Many lifestyle businesses are service businesses where the major commodity that they employ is people. Scaling a service business is extremely challenging, the more people you hire the more headaches you have (business problems come with hair on their head). Most lifestyle businesses don’t own much intellectual property (IP) that differentiates them from their competition. This is a wonderful way to build a business, and one that 4-Profit has been operating under for the past 15 years.

Both founding partners of 4-Profit started the business when we were just beginning our families. With our children still in diapers we closed our offices in NYC and moved our operations to our homes. This allowed us to spend significant time with those that we love most. Now that our children are starting to get older we have room in our lives to move to a different model. Moving forward 4-Profit will look more like the second type of business, a growth business.

A growth business is one that establishes an income for the owners that is reasonable to live and the rest of the money is invested back into the business. Most growth businesses will expand at a 25-50% per year rate, which is very nice growth and can support employing more people and growing the economy of any community. Growth businesses are a solid foundation for any local economy and employ lots of people. Many growth businesses will have some competitive advantage that allows them to expand. The ability to attract great talent is one of the cornerstones of a growth business. If you can attract top talent growing a business becomes significantly easier. Leadership is easy when you hire great people!

The final type of business is a hyper-growth business. These businesses use other people’s money to grow faster than the funds from their own business will allow. These are businesses that take in money to accelerate their growth, which requires super fast growth to justify the outside investment. There are typically three types of early stage funding sources for hyper growth businesses include friends and family, angel investors and venture capitalist. If a growth business moves into hyper growth mode and has been in business for many years than private equity and debt financing can play a part in funding growth.

Many who make this choice for the first time are surprised by the end result of taking outside money, but there are many individuals that thrive on this type of business. Being a serial entrepreneur is something that is in your blood, and if this is who you are then there is nothing more powerful for an economy than a hyper-growth business. Hyper growth businesses can hire hundreds of people in a very short timeframe, and sometimes even hire thousands of people.  There are those who believe that economic growth comes for large corporations, but it simply isn’t the truth. All economic growth comes from small growth, and specifically hyper growth, businesses.

Over the past 6 months we have added a few key resources to our team. In the process it continues to be evident that leadership is easy when you bring on great people. Leading average performers is challenging, but leading great resources is easy with a few keys. The first key is the recruiting process, making sure that expectations are set properly and that both sides understand the opportunity. The next step is on-boarding, which is critical to success. Great people want to see that the business is organized and can assimilate them into the business easily.

Great resources want to be part of the fabric of the company as soon as possible. Once they are on boarded you need to let them fly. The best resources are like eagles, they just soar above the rest and make things look easy. If you want to be a great leader, hire great people and see how your business moves forward.

Employee development comes when you understand that the best way to learn is through life lessons. Trying to solve all of the problems that your business faces by yourself is not the solution. Your people need to fail in order to learn.

This industry is filled with micro-managers that can’t imagine letting anyone fail. Reviewing everything that happens in the business is an impossible way to grow. You need to hire smart people, give them the general direction of where you want to go and let them take you there.

I can’t tell you how many people I have met that don’t trust their teams and believe that they are the only one with the right answers. That is the furthest thing from the truth. In the end it comes down to trust and knowing that you hired a smart person that will figure out a good solution to the problem. Jack Welch, the former CEO of GE, was once asked if he was going to fire a senior executive after he had just made a $5,000,000 inventory mistake? His answer, “why would I fire someone that I just invested $5 million in?”

Your people decisions will determine the success in your business. If you don’t think you have hired the right talent, go find better people. But, if you do have great people on your team let them do their job, let them fail and let them learn from their own mistakes. You cannot control everything and the only path to growth is trust and empowerment. Let your people grow!

We have met thousands of business owners over the past 20 years and few pass the test as a true CEO. Most are very smart and very capable business people that put CEO on their business card. What is it that makes a CEO successful? In Break Points we talk about a number of issues, including their ability to communicate, ability to attract great talent and their ability to instill loyalty in everyone they touch. Great visionaries are usually very good at figuring out how to get from point A to point B, but great CEO’s know how to take hundreds or even thousands of people on that same journey.

We believe there is also a difference between a business owner and an entrepreneur. Most business owners take a skill set they have or a business that they know and turn it into a venture that produces revenue. There are millions and millions of business owners, and many of them create great companies that employ lots of people. The true entrepreneur, on the other hand, creates a business that is scalable and reproducible and owns IP (Intellectual Property) that brings exponential value to a business. The most profitable businesses we have seen are the ones that own something, not just resell other people’s products.

The challenge is to decide which products to invest in and how do you fund those investments.

I have met hundreds of owners that are in partnerships, and many that have been through the pain of exiting a partner out of a business. When you have that conversation about how the exit came to be and what it cost the organization, you can see the pain on the owner’s face. You can see the agony that they went through for months based on the decision they made many years earlier with less information than they needed to make that decision.

We tell our kids not to get married without really knowing their prospective spouse, but in business we see people running into relationships after just meeting each other. You seem like a great person and you compliment me in so many ways, until there comes a time when they don’t, and that is a very painful time.

Business partnerships are extremely challenging when they work, but the challenges of a bad partnership can kill even the healthiest of businesses. If you are at the point of considering adding an equity partner in your business, think twice. Do you really know this person as well as you need to and do you really want to get married? Partnership Pain is no fun, so do everything you can to avoid it.

You think you told someone what to do and they shook their head in agreement. It is now four days later and you are expecting that person to come back to you with a specific solution, at least that was your take-a-way from the earlier conversation. The only challenge is that this individual didn’t have the same clarity that you had. In addition they didn’t ask for clarification because they are a bit intimidated by the fact that the owner of the company approached them to complete an important task for the company.

Instead of asking you for clarification they approached a few others in the organization (who weren’t part of your discussion) to provide their input and the project has now taken on a whole new meaning that you had not intended. In the end a lot of time is wasted and you don’t get your desired result. So, why does this happen when we are so confident that we described the objective so clearly.

Andy Grove said it best when he said “Communications is not about what you say but about what the other person heard.” How many times have you said something that you thought was so clear and the other person obviously heard something very different, almost like you were having two totally different conversations. This is all part of human communications and how the lack of understanding affects your businesses every day. Learn more about how you communicate and become a more effective leader!

Why did you start your business? What do you want it to do for your life? How much money do you want to make? How much money do you need to make? If you don’t know the answers to these questions how are you going to get to your desired result? The truth is that you don’t have a desired end result, so you will end up wherever the wind blows you.

I have met thousands of business owners, and those that can clearly articulate where they are going and why have the best chance for success. I can’t count the number of times we have conducted a workshop where we discuss a concept called an “End-Game” and have people lost as to what they want from their business. The truth is that if you don’t know where you are going, any road will get you there.

So, if you don’t have a clear idea of what you want to business to produce why choose one direction over another? Why do you make the decisions that you make and how can your employees buy into your vision if you don’t have one? People want to be part of something special, and unless you paint the picture of the future then your employees just go to work every day. That is so empty, when they could go to change the world every day instead. Do you want to change the world? If so, it starts with a plan to at least pick the destination.

You can only plan and theorize for so long, at some point you need to have the horses to execute. We can come up with great strategies that would work in well-run companies with top talent, but when you try to implement the same strategies with companies that have less capable employees and leaders the results are less than satisfying.

We have spent a significant amount of time helping clients understand the importance of recruiting great talent, but it seems to go over their head. They believe that if they plan better or team more effectively than their company will improve. In reality, a complete exercise in top-grading their talent is what they need to do. It sounds so easy, but in the end it takes a lot of time and energy to turn a company around and point it in a different and more promising direction.

I can only tell you what it is like for me to work with really smart people and I can’t imagine directing a team of average and poor producers. Either hire the best and let them do what they need to do or don’t even get started. The difference between average performers and the best performers is amazing when you see it happen in front of your eyes. Great resources run circles around the average performers and the results they produce can be amazing.

Break Points is the culmination of 18 years of working with entrepreneurs and businesses. We believe that the message in this book has two main audiences; entrepreneurs/would be entrepreneurs & corporations that need to interface with small businesses. Building a successful business from scratch is not easy. Many have tried and failed, many have tried and seen some success and then there are the rare few who can actually cash out.

This book honors all of those that have taken the chance to start their own business to reach their dreams. The sad part is that many businesses never reach the visions of their founders. There are dozens and dozens of reasons why this happens, but Break Points identifies the issues that face every growing business and identifying strategies to move their business forward.

In addition to helping these business owners, we hope that Break Points will be an insightful read for corporate employees that need to interface with these companies. We focus our consulting work in the IT Channel where countless corporations are trying to sell their products through the tens of thousands of small businesses that we call solution providers. The disconnect between these organizations is something we continue to battle. Our program called Understanding Your Partners’ Business is focused on trying to help address this issue.

Having worked at a large corporation it is hard to imagine someone who has never worked anywhere but a large corporation having much empathy for a business owner from a sub 100 employee company. In our UYPB program we discuss the concept of loyalty and how loyalty is earned.

In our work with solution providers, the most successful companies are extremely sales focused. They understand that there is no company without a sale and they are very good at using technology to solve business problems. They are also good at identifying good salespeople to bring into their company and can interview effectively to recruit top talent.

The challenge is that the majority of solution providers don’t seem to have the same mindset. Many companies we meet are technically driven and are able to grow to a certain size, but once they reach 8-12 employees they hit a wall. The reason seems to be their inability to recruit sales talent. As a non-salesperson it is extremely hard to differentiate between good sales talent and wannabe sales talent. Much of this comes down to building a solid pool of candidates and interviewing effectively.

We have been working with an industry expert, Mike Schmidtmann, to develop tools and a system to recruit more effective sales people. Mike has a 5 step process that we have implemented with a number of companies which has produced some great results. These companies have hired better talent than they had in the past, and they have not hired some candidates that they would have wasted time on in the past. We will be launching this process as part of our Talent Tracks handbook and look forward to helping solution providers in the critical success area.