The rule of 4, for small businesses going for growth.

blog Nov 19, 2019

When people ask me for advice about starting a small business, I tell them of the rule of two. It comes from a rule I once heard a VC (Venture Capitalist) share – the rule of 6. He says to entrepreneurs looking for investment from him “it’s 6 times harder, and will take 6 times longer, than you think to be successful in your business.”

Now, I think 6 might be OK if you are a VC – putting your money into a business (and usually a super fast-growth tech venture), where you are not contributing or influencing the business day-to-day. But I think it is a little too high for small business, especially for starting out.

So, I whittled it down to the rule of 2 for starting up, and the rule of 4 for growing a small business. The rule of 4:

“To grow your small business from a handful of people to a team of 10 to 50 where the business runs itself and doesn’t need you any longer, is 4 times as hard, and will take 4 times as long as you think.”

Yes, starting out is tough but you have more control, you are doing most of the work in the early days. Starting has long hours and many sacrifices but to get to business nirvana – where your baby runs itself without needing you – is a different and huge challenge.

Not just the need for systems and structure, a great team, superb people management and finance but also ensuring your ego is in check. Can you adapt to the role(s) your business will need from you as your team goes from a handful of people, to say 30?  More importantly, will you have enough humility to recognise when you can’t change to operate and be the leader or manager your business and team needs from you, and either step-aside operationally/day-to-day or sideways?