Dando Advisors

The Level I Company: "Entrepreneurial Startup"

Part 2 in a series of 4

Below are the characteristics and warning signs of a Level I Company, the Entrepreneurial Startup. This is the first of three defined company stages as part of The Business Lifecycle.™
 

CHARACTERISTICS

• The founders are usually actively involved in running the company.
• Initial capitalization consists of credit card debt, loans from Mom and Dad and angel investors.
• The primary emphasis is on developing a product or services and selling them and securing additional funding.
• Management, systems and planning receive minimal emphasis.
• Communication is informal.
• Employees work long hours and are paid modest salaries with promises of future wealth through equity.
• Management reacts more to customer needs than to employee needs.
• The founders are either technically oriented or market builders and are usually not skilled managers.
• The growth is greater than inflation but usually slow to moderate.

As a company matures, it often experiences subtle but very troubling growing pains.  Compounding the situation, managment, in its hast to maintain growth, often fixes its gaze outward on the environment and toward the future, hoping that more precise market projections and higher sales will provide the… Read More >

The Level II Company: "Rapid Growth"

Part 3 in a Series of 4

Below are the characteristics and warning signs of a Level II Company, the “Rapid Growth” stage. This is the second of three defined company stages as part of The Business Lifecycle™.
 
 
 
 
 
 
 
CHARACTERISTICS

• A capable leader is at the company helm (Level I growing pain resolved).
• The business has secured its first round and is preparing to secure additional funding.
• Number of employees increases significantly.
• More detailed attention is given to areas (in addition to developing a product or service and selling them) such as:
  • Marketing and sales
  • Inventory management
  • Culture and Personnel
  • Accounting, budgeting and finance
  • Systems support
  • Departmentalization
• Employee jobs are more specialized.
• The company becomes more impersonal due to having more employees.
• The growth rate is faster than Level I; sometimes accelerating at a very fast rate.

Usually one or more problems block a successful company’s transition to a higher level of performance.  If company leaders fail to address these problems (actually The 12 Warning Signs of Success™!), the company will fight the same battles… Read More >

Welcome to The Warning Signs of Success™

My hope is this blog will become a must-read guide for you and other business leaders at all levels, from the boardroom to the mailroom.  It is a distillation of more than 20 years of my hands-on experience, including:

* Serving as CFO/COO for a business we quickly grew to over $1 billion dollars in annual revenues and eventually sold,
* Personally interviewing thousands of business executives and their teams about how they grew their businesses and the difficulties they faced,
* Spending years in one-on-one meetings with hundreds of CEO’s and their teams, counseling them on issues they felt they could not share with anyone else,
* Sitting on and chairing several high-profile boards of directors,
* Learning from my own successes that grew out of BIG and PAINFUL failures
* Building a thriving coaching practice focused on helping business leaders (at all levels) take their company, themselves and their career to the next level, and
* Reading everything I could get my hands on about scaling a business and successful leadership.

My goal is to help you maintain (or rekindle) the excitement and motivation for passionately… Read More >

The Level III Company: "Market Leader"

Part 4 in a Series of 4

Below are the characteristics and warning signs of a Level III Company, a Market Leader. This is the third of three defined company stages as part of The Business Lifecycle™.

CHARACTERISTICS

• The company’s business niche is clearly defined and its products and services fit the niche.
• An aligned management team is in place (Level II crisis is resolved).
• A clearly defined organization is in place.
• The company has an identity beyond the founder(s) and the current leader (CEO).
• Efficient financial control and work process systems which produce quality end products are in place and operational.
• Short and intermediate term plans to focus the company are in place and followed.
• Managers are doing more managing than technical work.
• Profit centers are established.
• Growth rate remains rapid, however it is under control.
• Profitability is strong or trending towards positive EBITDA (Earnings before Interest, Taxes, Depreciation and Amortizaton).
• Cash flow works well.
• Equity capitalization is sufficient for the company’s size, revenue model, and burn rate.

Benefits of Becoming a Level III Company

• Survival and continued development of the company are not dependent on one or

… Read More >