Oh, Grow Up

These 8 steps will take your business from awkward adolescent to full-grown adult.

In four years of running her event planning business, Hope Lawrence has reached some milestones, including hiring her first employee and taking her first vacation. But now, the Austin, Texas, entrepreneur wants to take Michelle Hope Events to the next level. "We want to grow and do more corporate-event planning," says the 33-year-old, who envisions adding two event planners to her current staff of three, consistently and profitably surpassing the $125,000 in revenue she earned in 2006, and changing her own role from event architect to business strategist to develop contacts with corporate prospects.

"Our main challenge is making the right connections," Lawrence says. "Once we make the right connection--either with the right corporate-event planner, administrative assistant or marketing executive, and when they see what we can do for them and how we can measure the effectiveness of our events--almost all barriers are down."

No matter how much they accomplish, entrepreneurs are rarely satisfied and are usually preoccupied with a desire to turn their startup into a sustainable venture. "Taking it to the next level" is probably the most common way to express that. "I hear variants of that quite often," says Tom Long, founder of small-business advisory Solid Oak Consulting. "They're saying, 'How can I have a real company?'"

There are probably as many definitions of "taking it to the next level" as there are entrepreneurs. Still, almost all owners of young businesses should consider some basic steps on their way to building "real" companies. Starting with seeking advice and ending with putting profits in the bank, here are eight moves that will help your business grow up.

1. Ask
Entrepreneurs are romanticized as being able to rely on themselves for inspiration and figure out problems on their own. However, the first step for any entrepreneur who wants to grow his or her business into a mature enterprise is to ask for help.

"Have [an advisory] board, and fill that board with diverse perspectives," says Donna Kelley, associate professor of entrepreneurship at Babson College. "You don't just want people who are cheerleaders for what you're doing." To recruit board members, ask professionals such as accountants and attorneys for recommendations, check the ranks of professional organizations and consider people in your industry who aren't direct competitors.

Next, actually use what you hear from your advisors. They've been there and you haven't, Kelley points out. "Learning from mistakes takes a long time. You can get through that process with fewer mistakes if you have advisors who have been through that experience and are outspoken."

Asking for help has benefited Gil Pili, founder of Cornerstone Books in Salem, Massachusetts, as he's tried to grow the 2-year-old bookstore. "Getting a second opinion is always a good idea," says Pili, 43, who expects sales of $360,000 this year. "Talk to your accountant. Talk to the local chamber of commerce. Find someone you trust who has good business sense."

2. Focus
The final decision about what you're going to do as a business rests with you. It may seem simple, but many owners of young businesses struggle to decide where they'll focus--with undesirable consequences. "At this stage, so many opportunities present themselves," says Kelley. "You think you want to chase this or that, but you may be doing something that isn't profitable."

For Lawrence, choosing a focus was one of the main mile markers she passed during her first year in business. When she started, she was willing to take on anything related to events, from invitations to catering. But she soon decided to restrict herself to planning events and connecting clients with providers of outside services if necessary. Says Lawrence, "When people start businesses, they're so hungry that they're willing to do everything. I had to learn what [to] do and [not] do.

3. Formalize
Ask the owner of a young company where the business plan or operations manual is, and chances are he or she will point to their head and say "It's all up here." That's not good enough if you want to grow to the next level. Get your policies, practices and plans outside of your mind and onto paper.

"Write down how the various business processes in [your] company need to be done," says Long. "Start on certain areas that are important, like what are the 10 or 20 things you do when you get a new client? What do you do when you get a new vendor? It doesn't have to be overly complicated to start." Once you've started writing your company's operations manual, you'll find it has many uses, from guiding decisions about whether to take on a particular client to helping you decide who to hire for an open position.

4. Hire
Don't have any other positions, open or otherwise? Hiring your first employee is something almost all entrepreneurs will have to consider if they are to grow up. Hiring is both a big commitment and an essential one. "Taking it to the next level typically means hiring more employees," says Teresa Thomae, director of the Central Coast Small Business Development Center. "But [here in California], our high housing costs are a huge impediment to attracting employees. There are also the taxes that California businesses pay for every employee, equal to over 30 percent of their basic wage. It's really expensive to bring on new folks."

Even entrepreneurs in less costly areas hesitate before expanding their payroll. "That was the hardest step: hiring someone to answer the phone and believing I could support not just myself, but someone else," Lawrence says. But once she added her first employee, Lawrence saw sales mushroom. Now she believes that hiring is an essential step in a business's growth. "Hire the person," she says. "You'll grow to the point where you can support it."

Page 1 2 3 Next »

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the October 2007 print edition of Entrepreneur with the headline: Oh, Grow Up.

Loading the player ...

Shark Tank's Daymond John on Lessons From His Worst Mistakes

Ads by Google

Share Your Thoughts

Connect with Entrepreneur

Most Shared Stories