為什麼很多公司無法擴大規模？

Summary

The transcript emphasizes the importance of structure in scaling a business, identifying core functions such as operations, finance, sales and marketing, and R&D. It suggests focusing on sales and marketing first to generate revenue, followed by hiring key executives like CFO and COO. The speaker advises against raising capital too early, advocating for customer-funded growth to maintain control and equity. The key to scaling is filling roles with the right people, making data-driven decisions, and strategically growing the business.

Takeaways

• 🏢 Build a scalable business by establishing a strong organizational structure with core functions like Operations, Finance, Sales and Marketing, and possibly Research and Development.
• 🛠️ Start with focusing on Operations, which includes production and supply chain management, typically overseen by a COO in larger organizations.
• 💰 Finance is crucial and involves legal, accounting, and HR aspects, with a CFO managing these areas in a growing business.
• 📈 Prioritize sales and marketing for revenue generation, especially when the business is below a million in revenue.
• 🔑 Hire good marketing and salespeople to bring in revenue before expanding into other areas.
• 💼 Consider adding a general manager or executive for operations or finance as the business grows, starting with finance to manage cash flow effectively.
• 📊 Develop the ability to read financials to make data-driven decisions rather than being guided by emotions alone.
• 🔑 As CEO or entrepreneur, focus on higher-level strategies, such as attracting investors and key personnel to help scale the business.
• 🚀 Grow the business incrementally by filling each role with the right person, ensuring a healthy and growing organization.
• 💹 Avoid raising money too quickly and consider bootstrapping the business using sales and marketing to fund growth, thus retaining more equity.
• 🤝 Delay taking outside capital as long as possible to maintain control and freedom in business operations and decision-making.

Q & A

What is the first function that most businesses should focus on according to the transcript?

The first function that most businesses should focus on is Operations, which includes production, supply chain, and day-to-day management of the business.

Who typically manages the operations in a growing business?

In a growing business, the Chief Operating Officer (COO) from the executive team typically manages the operations.

What is included under the Finance function in a business?

Under the Finance function, businesses include legal, accounting, and human resources (HR).

Who is usually in charge of the Finance function in a larger business?

In a larger business, the Chief Financial Officer (CFO) from the executive team is usually in charge of the Finance function.

What is the role of Sales and Marketing in a business?

Sales and Marketing is responsible for revenue generation, and may include roles such as VP of Marketing and VP of Sales.

Can customer support be part of Sales and Marketing or Operations? Why might it vary?

Customer support can fall under either Sales and Marketing or Operations, depending on the business's structure and the significance of sales and marketing in their operations.

What additional function might a pharmaceutical business have?

A pharmaceutical business might also have a Research and Development (R&D) function to develop new ideas and conduct market research.

What is the recommended focus for a business when its revenue is below a million dollars?

When a business's revenue is below a million dollars, it should focus on sales and marketing to generate revenue first.

Why should a business prioritize hiring for the Finance function early on?

A business should prioritize hiring for the Finance function early on to ensure proper cash flow management and to have someone advising on financial decisions.

What skill is essential for a CEO or entrepreneur to develop according to the transcript?

The ability to read financials is essential for a CEO or entrepreneur to make data-driven decisions rather than being guided by emotions.

What is the recommended approach to raising capital for business growth?

The recommended approach is to bootstrap and use sales and marketing to fund growth, delaying outside capital raising as much as possible to maintain control and equity.

Why is it important to fill each role with the right person in the right seat?

Filling each role with the right person ensures that the business operates efficiently and effectively, contributing to the overall health and growth of the organization.

Outlines

00:00

📈 Building a Scalable Business Structure

The speaker emphasizes the importance of a structured organization for business scalability. They mention that most small businesses lack this structure initially. Key functions identified include Operations, Finance, Sales and Marketing, and potentially Research and Development. The speaker suggests that a Chief Operating Officer (COO) would manage Operations, a Chief Financial Officer (CFO) would oversee Finance, and a VP of Marketing and Sales would handle revenue generation. Customer support can fall under either Operations or Sales and Marketing. The speaker advises focusing on sales and marketing first to generate revenue, followed by hiring a general manager or executive for Operations or Finance. They stress the importance of financial management and understanding financials to make data-driven decisions. The speaker also discusses the potential complications of raising money too early and prefers a customer-funded business model to maintain control and equity.

Keywords

💡Business Scaling

Business scaling refers to the process of expanding a business operation to increase its size, revenue, and market share. In the video's context, it's about transitioning from a small business to a larger, more complex organization with a structured approach to growth. The speaker emphasizes the importance of a structured organization and strategic hiring to facilitate this scaling process.

💡Organizational Structure

Organizational structure defines how a company is organized and how various departments and functions are arranged to achieve its goals. The script discusses the need for a core structure with functions like Operations, Finance, Sales and Marketing, and R&D to support the growth of a business. The speaker suggests that a clear structure is essential for a business to scale effectively.

💡Operations

Operations in a business context refers to the management of the day-to-day activities involved in producing and delivering goods or services. The script mentions that Operations would include production and supply chain management, and as the business grows, a Chief Operating Officer (COO) would oversee these functions.

💡Finance

Finance in a business setting encompasses the management of money and includes accounting, budgeting, and financial planning. The video script indicates that a Chief Financial Officer (CFO) would be responsible for financial matters, including legal and human resources, as the business scales up.

💡Sales and Marketing

Sales and marketing are critical functions for revenue generation in a business. The speaker in the script advises focusing on these areas initially to bring in revenue before expanding into other areas. The script also mentions the potential for having a VP of Marketing and a VP of Sales as part of the executive team.

💡Chief Operating Officer (COO)

A Chief Operating Officer is an executive responsible for managing the day-to-day operations and procedures of a company. In the script, the COO is mentioned as a key role that would manage operations once the business grows beyond a certain size.

💡Chief Financial Officer (CFO)

A Chief Financial Officer is the executive in charge of financial matters within a company. The script suggests that having a CFO is important for managing cash flow and making informed financial decisions as the business scales.

💡Revenue Generation

Revenue generation is the process of earning income through sales, services, or other business activities. The speaker in the script stresses the importance of focusing on sales and marketing to generate revenue, which is essential for funding business growth.

💡Bootstrapping

Bootstrapping refers to starting and growing a business using only its own resources and revenue, rather than external funding. The script recommends bootstrapping to delay raising capital, thus maintaining control and equity in the business.

💡Customer-Funded Business

A customer-funded business is one that grows primarily through revenue generated from customers, rather than through external investments. The speaker in the script advocates for this approach to avoid diluting equity and to maintain control over the business direction.

💡Equity Dilution

Equity dilution occurs when a company issues more shares, reducing the percentage of ownership for existing shareholders. The script warns against raising money too early because it can lead to equity dilution, which means giving away control and ownership stakes in the business.

💡Strategic Hiring

Strategic hiring involves the deliberate and purposeful recruitment of key personnel to fill roles that are critical for the company's growth and success. The script mentions adding team members one at a time, focusing on roles like general manager, executive, or VP to support the scaling process.

Highlights

Building a scalable business requires a structured organization with core functions such as Operations, Finance, Sales and Marketing, and potentially Research and Development.

The Chief Operating Officer (COO) manages day-to-day operations, including production and supply chain.

The Chief Financial Officer (CFO) oversees Finance, Legal, Accounting, and Human Resources (HR).

Sales and Marketing are crucial for revenue generation, and may include roles like VP of Marketing and VP of Sales.

Customer support can fall under either Sales and Marketing or Operations, depending on the business focus.

In the pharmaceutical industry, Research and Development (R&D) is an additional key function for innovation and market research.

When starting, it's challenging to fill all roles simultaneously due to revenue constraints.

Recommendation to focus on sales and marketing first to generate revenue before expanding the team.

Hiring good marketing and salespeople is essential to bring in revenue before considering other roles.

Once revenue is generated, consider adding a General Manager or Executive for Operations or Finance.

Finance should be prioritized first to manage cash flow effectively.

Developing the ability to read financials is crucial for making data-driven decisions.

As CEO or entrepreneur, focus on higher-level strategies such as attracting investors and key personnel.

Growth from a small business to a multimillion-dollar enterprise involves gradually filling roles with the right people.

Avoid raising money too quickly to maintain control and equity in the business.

Bootstrapping and using sales to fund growth can delay the need for outside capital.

Raising money from venture capital can complicate business operations and potentially limit freedom.

Filling each role with the right person in the right seat is key to building a healthy, growing organization.

Transcripts

dear Dan how do you build a business

that scales I believe most businesses

they stay small because they don't have

the structure of an

organization and in the beginning I

didn't know that I needed a structure

either but business what it boils down

to you actually have maybe a core three

or four functions so the first function

that most businesses have is Operation

so under operation you will have your

Productions you would have your supply

chain operations and chances are when

you grow a little bit bigger your coo

your Chief Operating Officer from your

exective team will be managing those

right the operation the day-to-day of

the business then you have what I call

your Finance right under Finance you

will have your legal your accounting

your HR right human resource so chances

are when you get bigger you will have

your CFO your Chief Financial Officer

that's in charge of that from your

executive team and then later on you

have your sales and marketing right

sales and marketing this is in charge of

Revenue generation you might have your

VP of marketing your VP of sales right

customer support sometimes falls under

sales and marketing sometimes it falls

under operation it's up to you m falls

under operation because sales marketing

for us is such a big part of what we do

if you are in it if you're in

pharmaceutical then you might also have

another function what I call research

and de development right your R andd

that's where you develop new ideas do

your research and find out what the

marketplace wants your research and

development in the beginning when you

are growing your little business it's

very difficult to fill all these roles

at the same time simply because maybe

your Revenue cannot sustain to hire all

these people overnight but you could add

them one at a time now here's my

recommendation some people may disagree

with it but this is what works for me in

the beginning I believe when you are

below a million you should focus on

sales and marketing nothing happens

until a sale is made in business you

need to focus on Revenue generating

activities hire good marketing people

high good sales people bring in the

revenue first then you want to take that

money now you want to think about maybe

you want to add that general manager or

that leader or the executive or that VP

for operation or either for the finance

I say Finance first if you were to ask

me because you need someone to be

looking over the money right you need

someone to be able to advise you how you

to manage that cash flow now you need to

develop your ability if you don't have

the ability yet to read financials

because you need to know the pulse of

your business how do you make decisions

you want to make decision based on data

and numbers and not just emotions then

as the CEO as the entrepreneur you're

focusing on higher level strategies or

how to attract investors or how to

attract key people to help to run your

business and that's how you go from a

Smalls business that's doing a few

hundred th000 to a million dollar a year

to 2 million to 5 to 10 million to 20 to

30 million that's how you grow now I

don't believe that you should raise

money too quickly I always subscribe to

the idea of customer funded business

because when you raise money too early

as a business you are diluting your

Equity right you're giving away a lot of

equity if you could bootstrap and not

having to take outside Capital but

actually using sales and marketing to

fund your growth you can delay raising

money to as further away as possible

then you are in control of the business

whenever you raise money if you take

money from a venture capital firm or an

equity partner gets a little bit more

complicated that you may not be able to

create the way that you want or the

freedom that you want so that would be

my recommendation and that's how you

grow your business and bit by bit and

you fill each role the right person in

the right seat and before you know it

you've got a a pretty healthy growing

organization