3 Invisible Gates That Stop Most Companies Flat

How many people can one person manage?

Harvard Business Review estimates the ideal range for an experienced manager is between five and nine direct reports. Inc. pegs the sweet spot at seven.

The ratio of managers to direct reports matters because it explains why some companies grow and others plateau. Every business is different, but you can loosely think of a company’s evolution as a series of stages with an invisible gate holding most owners from progressing to the next stage.

Stage 1: Doers (up to 9 employees)

Stage 2: Managers (10–40 employees)

Stage 3: Leaders (40 + employees)

If you’re stuck, it’s worth asking if you have the right people in place to take your business to the next stage. In the beginning, you will need managers you can trust. And to graduate to stage 3, you’ll need people who can manage and lead. Some managers may need training, while other areas of your business may need an entirely new leader to make the transition successful.

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Franne McNeal, MBA Significant Business Results, LLC Significant GPS Small Business Growth Services