It’s exciting when a business grows. After all, it’s the goal of business owners to watch their companies grow and thrive. However, growth brings its own set of problems. There are many examples of businesses that have failed because the owners aren’t able to adapt to the challenges of a growing business. Sometimes, the people that are trying to build a company that are the very people that hold it back. But, if the entrepreneur builds a strong team and addresses common business challenges, the company can be successful.
Money is a big concern during a growth phase. There are a lot of financial decisions involved in expanding a business. Owners need to make decisions about the rate of expansion. Quick expansion is exciting but it can result in excessive debt and chaos. However, if the owners don’t allow for necessary growth, they can hamper their companies and miss important opportunities. Things can become overwhelming fast, especially when owners have to worry about cash flow, paying bills, borrowing money and paying employees.
How should owners handle these issues? Financial planners who specialize in growing businesses provide invaluable advice. They will help the owner plan for the future, budget and give advice about managing cash flow. Although there are costs involved in hiring financial planners, the investment pays off, especially if the business owner(s) aren’t skilled in finances. All companies should have a skilled bookkeeper. Often, companies hire a bookkeeper on a part-time basis. As the business grows, owners should consider hiring a full-time bookkeeper or accountant.
Businesses need systems in place to support growth. When a company is young and there are only a few employees, it’s easy to communicate through emails, texts or by simply walking down the hall. When the company grows, systems need to be put in place for storing information and communicating with team members in a timely manner. Project management or team management structures need to be put in place to support product development, problem-solving, marketing and information technology. There should be some kind of human resources and legal support, whether it’s internal or outsourced. It’s tempting to stay with the casual, laid-back approach that worked in the beginning, but a lack of systems as the company grows can lead to serious errors, customer dissatisfaction and even lawsuits.
Financial and systemic challenges are serious, but study after study show that business owners face the most complications when it comes to dealing with people. Entrepreneurs struggle with “letting go.” This means learning to allow others to handle the details. When people start companies, they are used to doing most things themselves. They closely supervise everyone that works for them. As the business grows, it’s no longer possible for one person to be in charge of the day-to-day operations.
Most entrepreneurs have trouble adjusting to their changing roles. Instead of doing all the work themselves, they need to learn to delegate. It’s impossible to control every aspect of the business as it grows. The owner needs to build a strong team of qualified people. Then, the owner needs to assign them duties and trust that they’ll be done correctly. This doesn’t mean the people shouldn’t be supervised. Everyone needs guidance, training and mentoring when they start jobs. This is very different than micromanaging, which is a problem entrepreneurs commonly face.
It’s hard to trust other people with important tasks when a person has built a company. Owners have a lot of financial and emotional investment in the business. They can’t allow their emotions to control their business decisions. If they hire competent employees, they need to allow them to do their jobs. The owner can’t constantly check everyone’s work or interfere in day-to-day tasks.
The results of micromanaging employees are serious. The business owner will end up working long hours when it’s not necessary. Employees are frustrated when their bosses are constantly interfering and won’t allow them to complete work. Micromanaging sends a strong message to employees. They quickly realize that their bosses don’t trust them to do a job effectively. They’ll feel undermined and resentful. Entrepreneurs often lose their best employees because they won’t let go of the simplest tasks.
Business owners need to accept that when they grow their companies, there will be significant changes. The owner will move to an executive leadership role and won’t be doing the day-to-day tasks anymore. They need to build teams they respect and trust and allow those people to do their jobs without interference. The company will need strong systems in place when it comes to financial management, human resources, legal issues and organizational structure. Although these changes can seem overwhelming, a cautious, measured approach to growth will help owners build a thriving business.