Entrepreneurship, Second Edition

6.1. Power of the Team

Teams provide multiple benefits. First and foremost, a team enables the entrepreneur to do more than he or she could accomplish alone. No matter how strong the entrepreneur, how many hours she puts into the business, or how many days a week she is willing to work, at some point a team becomes necessary to increase the capacity of the business. Babson College and the London Business School have been studying the impact of entrepreneurship on economies around the globe since 1999. One consistent finding is that businesses with growth aspirations plan on employing more than 20 people within the next five years.^[]

The size of your organization is also directly correlated to the amount of revenue your business can derive. For example, if you are launching a retailing business, your average sales per person will range from $57,000 per employee for a confectionary store to $496,000 per employee for a new car dealer.^[] The figures are lower for restaurants, averaging around $31,000 per employee.^[] So if you hope to grow a million-dollar business, you'll need to build up an organization capable of generating that kind of revenue. For a restaurant, that means you'll need 30-plus employees. Keep in mind that these figures are revenue and not profits. Thus, if you want $100,000 or more in profits each year, you'll likely need a much larger business. For a full-service restaurant, which according to Robert Morris Associates (RMA) has generated an annual average net income ...