- Owner - I opened a new facility, but even though volumes increased, I earn less than before;
- Me - How many additional employees did you have to hire to open it?
- Owner - 27 hires;
- Me - This happens because the complexity involved in maintaining governance of any company does not follow a linear function.
Profits do not grow linearly with volumes because they depend on various factors: among them, the most impactful is the number of employees. The reason does not lie in the increase of fixed costs, but in the executive capacity to execute which declines with a factorial function.
SOLUTION
To ensure the scalability of your company, you need an Organizational Model capable of keeping control of processes, adherence to long-term goals, and continuous development.
The organizational structure allows you to standardize the company’s “veins, bones and muscles” and make your business model repeatable regardless of the number of employees, location, and the product/service sold.