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Twenty Things That Will Guide Your Business Growth

2 December 2010 No Comment

Reaching a new growth stage and transitioning from a small to a midsize company is one of the toughest an entrepreneur has to make during the life of a business. Lots of what the entrepreneur has done to succeed so far starts to become ineffective or counterproductive as the business grows. More of the same doesn’t work; a new way of operating is necessary to get to the next level. I’ve been through this with my own companies and many more times with clients. Here are four of the most important categories – but by no means the complete list – with some specifics in each.

One of the key changes is to have different people working in different ways. An energetic, visionary entrepreneur is no longer sufficient, now management is needed.
1. Build a management team comprising operational (product and service delivery) and functional (marketing, HR, finance, etc.)
2. The founder doesn’t necessarily have to be CEO.
3. Learn to delegate effectively.
4. Different kinds of people and different levels of skills will be necessary.
5. Understand and clarify the role(s) of the entrepreneur – owner, manager, producer.

In a small company everybody works together and can pitch in to make things happen. A larger company needs to have well defined processes for every (yes, every) aspect of the operations.
1. Define the systems, procedures, and processes that dictate how things get done, who does them, and how to know if they didn’t get done.
2. Document all these systems, procedures, and processes.
3. Plan growth and get ready for what’s coming before it’s actually needed.
4. All jobs are differentiated and described, even those not yet needed, and hiring is a constant process, not a discrete event.
5. Identify new requirements for marketing and sales if product/service needs to change with growth, e.g. higher minimum job size.

Beyond a certain size company, no single person can know what’s happening with all the employees, all the customers, and all the vendors. More information is needed to effectively manage growth.
1. Have and regularly update a well defined plan and budget.
2. Goals and objectives need quantifiable measures for progress, not just results.
3. More detailed accounting provides an understanding of profitability by customer or product line.
4. Growth consumes capital so be aware that profitability doesn’t necessarily mean cash flow.
5. Make sure to get good, timely information from the people who are closest to the customers, and all the vendors.

All the clichés are true – it’s lonely at the top and you and your team are all lost in the same forest and can’t see the trees.
1. Get out and talk with key stakeholders on a regular basis.
2. Recognize when the business has outgrown outside professional service providers (CPA, attorney, bank, etc.)
3. Create a handful of key metrics that show the health of the business at a glance.
4. Only use advisors who have the experience to help plan beyond incremental growth.
5. Meet regularly with other business owners and share insights and challenges.

Every company is different and needs to prioritize different areas. Many of these can be started incrementally. It’s never too early to be thinking about and planning for the future. If you build a good business based on sound business principles then you can keep it forever or sell it tomorrow.

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