Stabilize the business at one to four people

1. The stage

Stages in this scale are counted from zero, so this is stage three, the fourth step up. Its theme is to stabilize.

Item	At this stage
Headcount	One to four
Your role	Trainer: the people you now have do not yet know what they are doing, and you have to train them
Leadership structure	Your first team of full-time hires: you and your three or four people. You are moving off some vendors, though you might keep some of them
How many companies get here	24 percent of businesses have one full-time employee or more

The count is offered as encouragement. With one employee you are already in a small share of a small share, and you are probably doing better than you think. The giant companies at the very top are few: seven are counted, out of 30 million businesses.

Flag: the spoken chain. Beside the 24 percent, the chain given runs: 9 percent of people own a business that makes a dollar; "cut that by 20 like 25%"; one out of four of the one out of 11 has another employee. One in four of one in eleven is one in 44, about 2.3 percent of people. The words "cut that by 20" do not fit that arithmetic. This page does not settle which reading is right.

2. Each function at this stage

Function	What it covers	What breaks	What graduates it
Product	The goods, services or results you deliver	Volume creates cracks, and you have no time to fix everything that is wrong	Fix what customers complain about most, or what creates the highest activation throughput
Marketing	Telling people about what you sell and why it is better	Leads do not buy fast enough, because they are colder than your first prospects	Long-term nurture, by email, content or both
Sales	Getting people to pay you for what you sell	You waste time on bad leads and lack time for good ones	Basic qualifications, outsourced appointment setting, and calendaring
Customer service	Getting the four Rs: retention, referrals, reviews and ascension (selling to them again)	New customers feel lost; it is not the experience it was when it was just you	Onboard customers properly
Information systems (called IT)	How you gather, store, analyze and display information	You pay for tools you thought you would use and do not use	Keep the tools you use, cut the rest, and build a basic sales pipeline
Recruiting	Finding and hiring people	Quality applications do not come, or finding good or new people takes forever	Write a job description and review résumés
Human resources	Protecting yourself from employees and regulators	You are not withholding employee taxes or fees	A payroll provider that handles taxes and fees by state, with the team onboarded to it
Finance	Managing and reporting your money	People are paid informally, bills get forgotten, and customers are not billed properly	Payroll processing, basic bookkeeping, and managing invoices and payments

3. Product: fix the one thing worth the most

• Start from the list you already have. At the last stage you collected feedback: everything that created friction for customers and every hidden cost they carried.
• Rank it by return on investment. Put your time, money and people where they return the most. For each fix, ask how big an effect it will have on the product, what it will cost in time and resources, and how likely it is to work. Force-rank the list on those, in that order. The questions resemble the four value drivers (SOP 3 — Diagnose an offer on its value drivers): you are looking for the fix that creates the most value for the business, by way of the customer.
• Or take the shortcut. If return on investment means nothing to you, ask why customers cancel or leave, and fix the number-one reason. If they leave because you respond too slowly, find a way to respond faster: maybe a platform, maybe visibility, whatever else it might be, or someone hired to do it.
• Longer term, work backward from activation, the point at which a customer receives value or engages with the product to get it (SOP 129 — Derive the activation point). Look at both sides: what occurred for the customer, and what the customer did. In one coaching business, activation might be put as the first call with a coach. The outcome that counted was a sale in the customer's first week from the leads the business helped generate, which made staying very likely; attending that first call, which got them started, was the behavior leading to it.

Sorting the list. A framework is named by the initials of reach, impact, confidence and expense. The grid shown with it sorts work by impact against investment:

Box	What sits there	What to do with it
High impact, high investment (upper left)	Work that costs a great deal	The most important box: do better here, not more
Low impact, high investment	Work that returns little and costs a lot	Not established on this page
High impact, low investment	Work that costs little money, time or resources and returns a lot	The obvious first move; most of the time it has already been done, but if something appears here, do it first. With a big team, delegate it
Low impact, low investment	Low-return, low-cost work, likened to golden BBs	Delegate it once you have a big team

How the named factors map onto the grid is not established on this page.

The trap. Sometimes you might love redesigning your website and it might do nothing. Many owners stay stuck there, or do what the view here calls B-minus and C-plus work: quick tasks give a fast feedback loop and a feeling of momentum, and for weeks and months they never do anything substantive. In one practice here, the best owners prioritize ruthlessly, and that made a huge difference to how fast the companies grew.

Pick the biggest one. Of the few items in the high-impact, high-investment box, choose the one with the biggest impact. It is usually a big hairy problem: usually with lots of variables, touching two or three departments. Those problems are typically the opportunity to set yourself apart.

Put a price on it. In one practice here, the big problem gets a tag for what solving it pays. Say you cut churn in half in one big move you think is highly likely to work: you might be paid $20 million, and the effort starts to look worth it. Grinding toward a fix in a vacuum sometimes feels disheartening; putting a figure on the lift in company value or profit helps motivation, at least in one practice here.

Why fewer, bigger wins. You have few resources now: you and maybe a couple of people. Once you have a big team, the low-investment work can be delegated.

4. Marketing: nurture the leads you have

At the start you reached people who knew you, your warm network, and maybe made some posts. That pool is spent, and everybody now is colder. The addition preferred at this level is long-term nurture: make the warm pool bigger, by email, content or both.

Email cadence. The best, in the view offered, is three emails a week, segmented. That is called the extreme, and you might be a little early for it. The minimum is one email to the whole list once a week, to show you are alive and top of mind, and kept value-driven.

The parts of each email.

• A subject line.
• A quick hit of value, to reward them for opening.
• Tactical value about whatever you sell.
• A call to action, which can be light: "by the way, if you want more help with this…"
• Train the click. The preference given is a PS that gives people something to click in general, so they get used to opening the emails and clicking in them.

In the example email given: a favorite saying for the quick hit; for value, four steps to break a belief (state the wrong belief, say why it is wrong, say what is right, give proof); an invitation to apply for a program; and a funny meme as the click's reward, so readers link the laugh with the sender.

Content. Make content consistently on at least one platform. It is not mainly for winning new customers: much of your audience is already there, only colder, so treat it as nurture more than lead generation. Algorithms might show it to new people, and that is fine. The building blocks are on other pages: almost all content hooks, retains and rewards (SOP 20 — Build the content unit: hook, retain, reward); topics come from five places (SOP 22 — Source content topics); and pieces are made of lists, steps and stories (SOP 23 — Retain with lists, steps and stories).

5. Sales: qualify, and hand off setting

Decide who you will not sell to. Ask what someone needs before they can even use your product. You could then look at your worst customers, the ones who take the most customer-service time and cause the most trouble. They are often the people you should not sell to, who do not meet those requirements.

In one business, the criteria were built one lesson at a time: first the kind of customer its systems were built for, with the kinds that had done badly ruled out; then a minimum staff size, because customers without enough help could not run its systems; then a minimum customer count, because one of its main plays did not work below it.

Add the test of budget, authority, need and timing. It is said to have started at a large company about 50 years ago and to have more or less stood the test of time. You want the prospect to have the money to spend, to be able to make the decision, to need what you sell, and to want to start now. On need: a prospect who does not run the kind of business you serve has no need, and one already at full capacity has none unless they want to open another location. (SOP 98 — Qualify with the four-letter test carries a different qualification test.)

Where to ask. Ask either on a set call or on an automated application form: questions about who they are, and about what you need to know to close the sale for the right people.

An outbound tactic. This is for business-to-business selling: leave a voicemail that names the prospect's competitor and asks for a call back. SOP 30 — Leave a third-party-trust voicemail carries it.

6. Customer service: onboard properly

Onboarding here runs in steps, in this order. Much of it is said to sound like the way a sale is closed, because people respond the same way whenever you need them to change behavior: first to buy, now to keep doing the work.

• Set goals. Establish clear expectations: what their goals are and what they are trying to do.
• Give a personal success path. This is the goal; these are the steps to get there. The step's own name is not established on this page.
• Make the first experience good. Give them a positive start with quick wins, so they see value at once. All onboarding is a streamlined route to the activation point, as fast as humanly possible.
• Fit it into their workflow. For a consumer, fit it into their life; for a business, into its daily operations. Do not add work for them; the aim is that nothing new is needed to use what you sell.
• Track it and give feedback. Set regular loops to monitor, recognize, reward and relay, and decide how often you will talk. Every time, book the next meeting from this one (SOP 89 section 6): at the end of the onboarding call, say when you will speak next and whom to contact about problems.
• Hand off to ongoing support. Once they have had success, move to long-term support and the relationship. Above all, make sure they know where to ask questions. Early customers had your cell phone; now it is this chat support, this portal, these ways to message, response times within 5 minutes, and named reps who know their business.

Compare a sale followed by silence: no email, no idea what happens next. With the steps done, customers feel they know what is going on. SOP 139 — Onboard customers to the activation point carries a separate set of onboarding guidelines.

7. Information systems: cut the tools, build the pipeline

• Find which tools you actually use. Keep those, and extend their free trials through credits or discounts if possible. Cut the rest.
• Build a basic sales pipeline. It might be held together with tape at this point, and that is fine; it gets tied up at a later stage. The stages named: opt-ins, scheduled, showed, offer, closed, cash collected and back-outs, listed under the word conversion.
• Treat it as your baseline. You cannot improve without knowing where you are, so start tracking, with enough software to track these numbers. You can add more, and it will differ a little by business. Each stage is said to come with a descriptor and a metric; neither is given.

8. Recruiting: write the job ad, then screen the résumés

Write the job description as an ad.

Part	What goes in it
Hook	The headline and first line: speak to their dream job and to how this role is seen differently. Why apply here and not to the job across the street?
Retain	Why the company's values matter, what they are, and how they turn into daily work in this role
Educate	The main activities of the job, the top three things they will be responsible for, and how that feeds the company's growth
Reinforce	What is in it for them: pay, benefits, paid time off, the working environment, any workplace awards, and the like

Following this structure is said to bring far more applications. More than once, a company struggling to fill a role changed only the headline, the description of the role and the first line, and went overnight from about 10 applicants a week to about 30 a day. The gain is not only ever a doubling: sometimes it is 30 times, said to happen all the time when the ad is done well. That is why they are called job ads. You began with an outside funnel for customers; now you are building an inside funnel for talent.

Review the résumés. Sort for what you want, then against what you do not.

• Want: past achievements backed by objective data that they did it; experience relevant to your business now and to this job; skills that transfer, and a note of the ones that do not.
• Do not want: irrelevant experience, too much or too little experience, or the wrong skills for the role.

Benchmark. Aim for a 20 percent pass rate to the screening call: from 100 applications, hope for about 20 you could pass. If you would pass none, you might have a job-description problem. The rate measures the job description and your review together.

Too much experience. Too little experience often shows, because they do not know how to do the job. But a strong ad might also bring in people who are overqualified. You might hire somebody from a company at stage seven who brings its habits into a stage-three company, and that sometimes causes issues. Look for experience that fits the stage you are at now and the one you will reach in the next 12 to 18 months; beyond that is not something to weigh today.

The first team sets the culture. The first few hires set the bar and the culture. Early on you ask friends and family to help on the side; set the wrong direction and it can cause real problems when you are three or four times bigger, and all of it has to be undone.

9. Human resources and finance

The payroll provider, the bookkeeping, the invoices and payments, and the rest of the money setup for this stage are on SOP 150 — Set up the finances stage by stage. Payroll is said to fit under either function, depending on how you split them. The law and tax rules are not covered on this page.

10. The bottom line

The constraint at this stage is that the workload exceeds your current resources. To graduate, get help; that is why you hire your first people. By now you are a business owner: you have a business, revenue and employees. The next stage is five to nine people, with the theme prioritize (SOP 149 — Prioritize and niche down at five to nine people).

11. What this page does not decide for you

• How the named factors map onto the impact-and-investment grid. Not established on this page.
• The name of onboarding's second step. Not established on this page.
• Whether "conversion" is a pipeline stage or the heading over the others. Not established on this page.
• The descriptor and metric for each pipeline stage. This page gives no figure for any stage's metric.
• How to outsource appointment setting and calendaring. Not established on this page.

12. What this page does not cover

Job interviews are SOP 149 section 9. Email sequences are not covered on this page.