What Are You Prepared to Lose?
While business growth tends to be a major goal for most business owners, with growth comes pain. Here's how you navigate those challenges.
Many, perhaps most entrepreneurs would like their businesses to grow — whether from ambition to create an empire or just to reduce the risks inherent in being a little business. To do so the entrepreneur has to change roles.
They must move from where they can control everything, and change from working as they always have. Being human, we fear moving away from familiar routines, we find it hard to give up authority and we lie awake at night worrying if we can afford all those extra people.
When you run a small business you make all the decisions, you monitor performance of your employees, have direct contact with customers and have a small nest egg so you can still pay your people in bad months. A bigger business means higher overheads, more debtors, and additional inventory, all of which will put a strain on cash flow.
You are likely to need more working capital to finance growth and may have to take a loan, which only adds to the risk. You are also likely to have less day-to-day control over operations and will worry about whether your managers are about to commit an appalling blunder.
A more insidious risk is the growing distance between you and customers as the business adds layers of sales managers, sales people, project managers, and branches.
FINDING THE OPPORTUNITIES
It’s difficult enough just to stand still in tough times, let alone grow strongly.
The more difficult the competitive and economic situation becomes, the more we want to control every aspect of the business.
We hesitate to fill vacancies, clamp down on expenses, get enraged when people make mistakes and push the sales team until they get nervous. We develop a hang-in-there mentality and hope for better times.
Paradoxically, tough times offer great growth opportunities. While others cut down on training and marketing, you have the opportunity to lure customers away from them with aggressive marketing and pricing.
You can build a work environment that will attract the best people by offering strong customer support and good development opportunities. If you are bold, you have the opportunity to lock in the best suppliers by paying on time and signing long-term contracts while others delay payments and seek cheaper suppliers.
It takes courage to do this, and you will feel the loss of security and comfort zones.
In this rapidly changing world, it may be easier to grow a business now than it has ever been. Businesses that embrace change and look for opportunities in uncertainty can scale rapidly.
Disruptive technologies have changed the rules and allowed new businesses to grow to international giants. Waste — especially packaging waste — green energy, medical technology and urbanisation have all presented global opportunities for smart entrepreneurs.
Change is difficult to manage; we prefer our comfort zones, but treating change as a friend rather than a fear could give your business the growth spurt you desire.
LETTING GO TO MOVE FORWARD
One of the hardest things to do as a business grows is to discard products, people and processes that have built your business to where it is today, but will be a hindrance to you as you grow. You may have a favourite product that was the essence of your start-up, but is now out of date and uncompetitive. Kill it.
There is pain in dealing with staff and suppliers who will not be able to keep up with your growth, especially those who stood by you when you needed them. I am all for loyalty, but if loyalty becomes a hindrance you must act.
Be kind to them, give them their dignity rather than carrying them as a charitable favour. Change their roles, or find alternate work for them. Getting rid of encumbrances, products, people, suppliers, customers and processes is all part of what you need to do to take your business into a growth phase.