Why Small Projects Don't Indicate How You'll Perform on Big Projects

Mike Michalowicz

Wednesday, March 9th, 2011

Many businesses make a big mistake when it comes to judging how much work volume they can comfortably handle on an ongoing basis. Do you know what your limits are, without turning your company upside down and compromising on quality, or in other areas? If you are like most entrepreneurs, you have a distorted view of this, thinking you can take on more than you really can.

Case in point: recently, I got a call from a guy who had a $3,000 sales day. This was a great feat for him, because he normally does about $750 per day. He was, legitimately, really pumped. He then said to me that he now knew what it is like to have a million-dollar company. Um, no, he doesn’t. Not even close!

The Volume Trap

It is important not to fall into the same trap that he did. You see, one good day of sales can be managed by a small business, with small-business systems in place. So maybe he had to call in his family to work through the night, in order to get that $3,000 of work fulfilled. Maybe he had to work the weekend and skip the family reunion. Or just maybe he was busy for only a few weeks, and then it was really quiet.

The thing is, any small business can handle one big day. That’s because, rather than requiring long-term changes in the business, it just requires more effort for that moment in time. You will do what you have to do, to meet that spurt in demand, and then your business will go back to running as usual. Meeting that sales spike may require a short-term increase in duties, and you may have to juggle things to pull it off, but you will. That’s because you know that there won’t be another $3,000 day coming the next day and the next, and the next.

If that guy was to land $3,000 in saleseveryday, it would be a big problem. He can’t get the family in every night, working throughout the night to meet the demand. And he can’t work non-stop with no sleep. Even if he missed every family reunion or get-together for the next year, it wouldn’t be enough (and his family relationships would likely suffer).

Supporting the Sales

You see, if you can get $3,000 in sales every day, then you really are a $1 million company. And that means that you need to make some changes and put the right systems in place, to be able to support it. If you can’t, your quality will lag, you will not be able to keep up with customer demand, and that demand will head for your closest competitor.

So, the next time you get a big spike in sales, don’t let it trick you into believing you can handle it on a daily basis. Instead, watch how you handle the spike, and try to discover ways to keep the work flowing without having to work harder. Take the time to analyze everything and figure out the systems you can improve upon. Determine the temporary people you can bring in, and consider the equipment you need to replace.

Growing Pains

Once you have done your analysis and evaluated the right factors, you will be prepared to take on that larger volume of work on a continuous basis. That way, the next time you have a big spike in sales, things should go smoothly, and you will be ready for big spikes to happen every day. And honestly, you will only know what it is like to have a million-dollar company when you do, in fact, have a million-dollar company.

About Mike Michalowicz

Mike Michalowicz is an entrepreneur, 3 times over - building 3 multi-million dollar companies over 15 years. He is the author of the "business cult classic" (per Entrepreneur Magazine) The Toilet Paper Entrepeneur, a small business columnist for The Wall Street Journal and President of Obsidian Launch a behavioral marketing firm.