Starting a business is a tough challenge, but there is a tougher one – growing that business successfully. In the company’s beginning, you are doing most of the work, you make the decisions, and you have more control. Starting a business indeed requires long hours and lots of sacrifices, but growing the business is another great effort that requires different talents and skills.
Many small businesses want to remain small and will always do so, and there is nothing wrong with that – if it can be done. Sometimes situations make growth necessary in order to stay in business. As Baseball Hall of Famer Tony Gwynn once said, “The minute you’re satisfied with where you are, you aren’t there anymore.” Prime examples of this abound in the technology industries of computers and mobile devices.
Other businesses strive to grow from the early days of the company. Many do so successfully, but unfortunately most do not. The entrepreneur himself is often a stumbling block. Great entrepreneurs frequently are not good business managers and the company outgrows them. The same ego that drove them to be great entrepreneurs often limits them in growing the business due to their refusing to relinquish any control or decision making. Thus, the business begins to stagnate if it outgrows the management desires or capabilities of its founder. As a business grows, a good business person has to share responsibilities with others and have confidence in them to help grow his business.
So who are those others? A team should be identified, and although every situation is different, this team should reasonably involve key employees, a good accountant, a banker, and an attorney. Many growing companies set up a board of advisors and have regular meetings to discuss issues within the company.
Growth takes cash. I once heard an older, battle tested growth veteran tell a young growth oriented business owner that the only difference in their cash flow issues was where the decimal was placed in the figures. Lack of cash limits and sometimes kills growth oriented companies. What is your strategy to fund your growth plan?
Growth will take the business into uncharted territory. As a company gets larger, it needs different processes, more capable equipment, and more staff to handle the operation effectively. Do you have the staff in place and the systems available to travel the course that you have set for the business?
In the life of any business, there comes a time when the owner has to step aside. This move may be by choice, or dictated by death or other circumstances. As a business grows, the importance of a succession plan becomes more critical. This written document provides for the continued operation of a business when the owner leaves the company, by choice or otherwise. A well done succession plan provides for the owner’s leaving and also those who remain at the company.
It takes discipline to manage a quality growth oriented company, and one of the best ways to develop such discipline is to produce a written strategic plan. Such a plan describes a company’s vision, mission, and goals, as well as its strategies for reaching these objectives based on the environment the company is functioning in.
One of the most important questions of all is: Is growing a larger business really what will make you happy? If so, go for it, but not haphazardly. Plan for it, and don’t let growth just happen uncontrollably. Business growth is a good thing, but only if it is planned growth and done in a reasonable, manageable manner.
Article by: David Dunn, Consultant, SBDC Albany Office