Marshall Haas, cofounder of Need/Want, used to think that a company needs to scale in proportion to the revenue it generates. Thus, a $100 million business needs to have at least hundreds of employees and several layers of bureaucratic managerial hierarchy. What he’s found in practice, though, is that, with fewer than ten employees, his company can grow very slowly and still increase revenue—which is currently at nearly $10 million.

To help you get started, ask yourself the following:

• Assume you have a magic wand that makes everything your team does go perfectly. What do you hope will be different in two to three years compared to now?

• How would you want someone who works on an adjacent team to describe what your team does? What do you hope will be your team’s reputation in a few years? How far off is that from where things are today?

• What unique superpower(s) does your team have? When you’re at your best, how are you creating value? What would it look like for your team to be twice as good? Five times as good?

• If you had to create a quick litmus test that anyone could use to assess whether your team was doing a poor job, a mediocre job, or a kick-ass job, what would that litmus test be?

The cost of a bad hire is 15x his or her annual salary, according to Topgrading, so it’s important to get the recruiting and selection process right.

Our pet peeve is when a company’s leaders think it should grow regardless of profit. This is just reckless, unless you’re a venture-backed firm pioneering new territory. For everyone else, we recommend getting profitable with the work you have, proving you can get to 15% profitability (based on our adjusted Simple Numbers), adding labor to knock profit back

to 10%, and then growing to 15% again. Lather, rinse, and repeat.

To tackle the cash conversion cycle, start by reading “How Fast Can Your Company Afford to Grow?” a Harvard Business Review article by Neil C. Churchill and John W. Mullins.