Growing
Pains
By
Evan Wise, Managing Director of Management One
We constantly hear about small businesses, mid-size
business and big business. We accept the delineations
and pretend we know exactly to what the speaker is referring.
The question that constantly exists is, “When
does a business stop being a small business and start
being a mid-size company?” The more important
corrolary is, “how do I do that in my business!?”
Although there might be many definitions
of a small vs. a mid-size business, the one that the
owner has most control over is the management of the
company. Most businesses start out small. Everything
is small except the ideas and dreams. Normally money
is limited, space is at a premium, staff sizes are small
and the owner is an entrepreneur. One aspect of an entrepreneur
in a small business is that he makes all the decisions
himself and he normally carries out many of the required
actions himself as well. Often he may be the only one
in the business. This is truly a small business.
With hard work, a viable strategy that
is implemented properly, a great product and a little
luck, the business grows. That means moving out of the
basement and into an office. It means hiring some people
to help the owner carry out the required activities
like sales, purchasing, bookkeeping, fulfillment and
production. Often the owner continues to keep one aspect
of control in his own realm and that is making decisions.
In many businesses the fact that the
owner must approve or make all decisions hampers the
ability of the company to grow to the next level. Slowly
the growth curve flattens out and plateaus as a level
commensurate with the capacity of the owner to make
decisions that are critical to the growth of the company.
The more micro managed the company, the lower the level
at which revenue, market share and profits peak.
In order to become a mid-size company
and orient the growth curve skyward once again, the
company must change the way decisions are made. The
culture of the management process must change from the
top to the bottom. People must be trained to make decisions
that are critical their success in their job. Employees
must be privy to the information that is needed to make
the right decisions without input from above. Sometimes
the right people must be put into positions in the company
to spur success.
The buzzwords and catch phrases like
“empowerment” and “trust” must
become reality throughout the organization. This is
a difficult task. It requires a long-term commitments
and a management process that works. Often that means
outside guidance and help to stay on track to change
the culture and become a mid-size instead of a small
business.
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