Scaling a company from zero to millions isn’t easy. It can be done with great leadership and steady growth.
We spoke with one entrepreneur, Bruce Pellegrino, who built a company from scratch. Over the course of eleven years, he grew it to $10 million in revenue.
According to Pellegrino, scaling a company to that size requires a few key components:
- Risk and reinvestment of money
- Attracting and retaining key employees
- Sharing success with employees and contributing to their personal growth
- Surrounding yourself with intelligent people who have great ideas and advice
- Having incentive-based compensation in place to reward employees for hard work and dedication
- Expanding your market to other cities and countries
Here’s how he did it:
“It took eleven years to go from zero to $10 million, and then we merged with another company that was doing something similar. They were a $20 million dollar company. So in 1999 we had a $10 million business, plus a $20 million business, which made it a $30 million business. Then we built that up into a $90 million business by 2005 when GE bought it.
The growth was pretty steady and consistent from 1988 to 2005.
Growing a company requires a lot of hard work and a lot of reinvestment of money. It requires attracting and keeping good employees. It requires keeping customers happy by doing whatever is necessary. It also requires some risk-taking.
Oftentimes, you you need to do things outside of your comfort zone. For me that meant opening an office in Houston, or Chicago, or Canada. Also, merging a business with another business involves risk with the transfer of equity…things like that.
More than anything, growing a business requires a bit of luck. I was fortunate to be surrounded by really wonderful people, both as employees and friends. Some of my friends served as my board of advisors, sort of like a board of directors but not in the legal sense. Having those four or five people helped a lot; they provided a great deal of insight and fresh ideas on how to build a solid business foundation.
Expanding to France, Germany, the United Kingdom, Japan and China were also very necessary steps to scale the business from say, $30 million in 1999 to $90 million in 2005. Exporting products and selling them internationally requires a fair amount of logistical support, legal entities, accounting — there’s a lot to it. You need a good team you can trust because they’re spread out around the world.
Another important element is sharing success with key people. For instance, making the guy in Germany and the guy in Japan equity partners was important. It helps to have a good, incentive-based compensation (bonus) system that rewards all employees for working hard, for working smart, and for sticking around. Good people will want to be with a growing business that is rewarding them; if they see a better opportunity elsewhere, you can’t blame them for leaving.
Retaining key people and allowing them to participate in their own personal growth are really big parts of growing a small business.”
Click here for the full interview with Bruce Pellegrino about how he went from mowing lawns to building multi-million-dollar companies >>
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