If you are a business owner or senior business executive you should know that there are a number of distinct milestones as a business grows.
They are critical to your business success or failure. I’d like you to be aware of these and so I have listed them here for you:
Starting a Business
It should be obvious, but here are some pointers:
1. Make sure you have a market (i.e. people want to buy your products or services) by testing a Minimum Viable Product (MVP), i.e. the quickest and least expensive thing you can do to see whether people will pay money for what you are offering.
2. Give yourself sufficient runway to be successful. I.e. don’t start a business when you can’t invest the appropriate amount of time or money to get it off the ground. I know that entrepreneurialism is once again something celebrated (it goes through ups and downs) but sheer enthusiasm is not going to guarantee success. Hope is not a strategy, as they say.
3. Your product or service won’t sell itself. You will need to be prepared to go out there and hunt for business. Too many startups seem to believe that their idea is so great that the business will take off as soon as it is launched. Sorry, but you need to get out and sell.
Scaling a Business
Initially, you, the business founder/owner will do all the work: sales, marketing, product development, finance, legal, etc., but if your business is successful it will soon outgrow the capabilities of just one person. You will discover your own limitations insofar as you simply can’t be good at everything. E.g. you might be very good at coding, but may find you are lousy at finance.
So, you will need to hire staff or contractors. This is a minefield in its own right but hiring your first sales rep is a particularly critical step: Get it right and you set up your business on a growth trajectory. Get it wrong and your business may suffer, along with your reputation.
So, the best advice I can give you is this:
1. Be very clear about what type of help you need and how much of it.
2. Be very clear on how you can support their success, because their success is your success
3. Pay attention to your business culture. It will follow you around.
Growing a Business
There comes a time in every growing business where it needs to reinvent itself. The rule of thumb is that up to a maximum of about 100 staff a business owner can run it like a family concern where he or she knows every employee personally, knows about their personal and family circumstances, celebrates their birthdays and family milestones, and bases their management style on personal familiarity.
Go beyond 100 staff though, and it becomes impossible to remember the personal circumstances of each employee, and the management style needs to change from running a family business to putting in organisational structures, management and business processes, delegations of authority and KPIs that will inevitably move the founder/owner away from the front line.
This is a critical point as it is the business owner that needs to change, as well as the business. He or she will not like not knowing any longer every aspect of the business. The temptation will be to “check in” with people and inadvertently micro-manage one minute, then become absent while they are “checking in” on another part of the business, thus driving their own staff crazy with their “hot and cold” interventions and inadvertent undermining of their managers’ authority.
At this point, my advice is this:
1. As difficult as it may be, accept that you need to give up control to the people you have appointed as your managers.
2. Don’t be tempted to “help out”. If you must, make sure you won’t undermine someone else’s authority by checking with them first.
3. Keep your emotions in check. Accept that the business is no longer your baby, it has grown up and is now becoming an adult. You are no longer the business owner, you are now the CEO.
Running a business is not easy. It can be immensely satisfying but also can be hard work. The better prepared you are for the ups and downs, the better for you and for your business.
My last piece of advice: Don’t be proud, seek advice early and listen to it.