Ask any small-business\nowner what he sees as the major challenges to growing his business, and chances\nare he’ll say: winning more sales. Ask any medium- or large-business owner what\nher major challenges have been, however, and she’ll probably say: structural\ngrowing pains — putting into place the necessary processes and structure to\naccommodate a higher volume of business. In fact, one of the most common\nreasons businesses plateau at a certain level is their inability — or\nunwillingness — to develop the structure needed for growth.<\/p>\n\n\n\n
But aligning\nstructural changes with sales growth is not simple. It is often more of an art\nthan a science. The systems, processes, staff, and organization changes needed\nto grow are ongoing and dictated by myriad factors such as the nature of the\nbusiness, its capital requirements and, ultimately, customer demands.\nNonetheless, certain structural growth concerns — excluding financing and\noffice\/production space issues — are shared among all growing companies and\nfall into three overall areas: organizational structure, policies and\nprocedures, and systems\/technology.<\/p>\n\n\n\n
Among the most common\ngrowing pains small companies experience are those related to organizational\nstructure. Organizational structure and reporting hierarchy for a 25-person\ncompany is quite different than it is for a five-person organization.\nTypically, an entrepreneur can manage fine until there are about a dozen people\nin the organization. At this point, the initial structure — where everyone\nusually reports to the owner — breaks down. In effect, nothing can be done\nwithout involving the owner, creating a communications log jam and a barrier to\ngrowth. A telltale sign of such a situation is the line of staff outside the\nboss’s office — waiting patiently for a decision before work can recommence.\nThe best way to overcome or prevent this from happening is simple: Trust your\nkey employees and learn to delegate. A good place to start is to look at where\nyou are spending your time. You can still have final say on any important\ndecisions, but you need not be involved with the time-consuming, day-to-day\nissues that can prevent you from focusing on larger, more strategic matters.\nIt’s also important to formalize delegated authority with an organizational\nchart and job descriptions. These will help you better define functional\nexpertise for a given job and for various departments across the organization,\nand provide the foundation for the growth of future personnel and key\nmanagement staff.<\/p>\n\n\n\n
Lack of functional expertise is another common growing pain of small companies. Too often, businesses fail to recognize that specific expertise is needed as they grow. Typically, small businesses are organized around the manager’s area of expertise, such as marketing, accounting, or production. This specialized expertise often prevents the business owner from recognizing problems that may arise in other parts of the business. It’s a good idea to periodically get an outsider’s opinion of where expertise may be lacking. These need not be paid consultants, but are often trusted business acquaintances. Tapping into this same group, you can also form an advisory board to give you periodic feedback on strategic direction.<\/p>\n\n\n\n
For most smaller\nbusinesses, written policies and procedures are often nonexistent and sometimes\ncursed. Typically, they are associated with the bureaucracy and inefficiency of\nbig companies and the enemy of customer responsiveness and quick time to\nmarket. Not surprisingly, most smaller businesses have few documented\noperational policies or procedural guidelines. But it is precisely this lack of\ndocumentation — and the thought that goes into it — that can put a\nstranglehold on rapid growth. If your business is growing fast enough to\nrequire frequent additions to staff, formalized policies are a must for\ntraining purposes. Even if you are expanding at a moderate pace, documented\npolicies will likely be necessary once you reach 20 or more employees.<\/p>\n\n\n\n
What warrants a formal\npolicy and what should be documented? This will depend on the nature of your\nbusiness and average skill level of your employees. In general, however, it’s a\ngood idea to document all HR policies in detail, expense approval authorization\nlevels, inventory control policies, billing and collection procedures, and any\noperational policies that could materially affect your business if they went\namiss. An annual budget and sales projection, updated monthly, are also a\nnecessity if you are ever to obtain outside funding or sell your company. Later\non, consider putting together a comprehensive policy manual where employees can\nget answers to questions when decision makers are unavailable.<\/p>\n\n\n\n
As you grow bigger,\nyou will also need to put into place more formalized communications channels\nfor employees and customers. An informed and involved staff is usually a more\nproductive and enthusiastic one; whereas a staff that is left in the dark often\nfeels alienated and unappreciated. Regularly scheduled employee meetings, periodic\ne-mail updates, and a cascade communications policy are several ways to make\nsure your internal communications channels facilitate, not constrict, growth.<\/p>\n\n\n\n
| Here are some sure signs that structural changes may be in order. * Sales continue to grow but profits do not. * Everyone is working increasingly long hours. * People spend too much time putting out fires. * There are constant lines outside the boss’s door. * Regularly scheduled meetings or employee communications are not happening. * The “system” is constantly down. * Aging equipment is not replaced. <\/td><\/tr><\/tbody><\/table>\n\n\n\n Systems\/Equipment<\/strong><\/p>\n\n\n\n Perhaps more obvious\nthan organizational or procedural growing pains are those associated with\nsystems and equipment. Smaller businesses are often the last to upgrade to new\ntechnology, usually due to cost. Yet the costs of not upgrading are usually\nmuch higher. Low productivity, frequent downtime, and incompatibility with\nnewer client systems can cripple a business that’s poised for growth. There’s\nalso the matter of keeping up with your competitors both operationally and\nacross product and service offerings.<\/p>\n\n\n\n The average computer\nis virtually obsolete in just three years, and most of the widely used software\napplications come out with new versions every two years, so keeping on top of\ntechnological advances must be an ongoing endeavor. Start out by working regular\ncapital upgrade costs into your budget. Consider dedicating a full-time person\nto information technology (IT), if you don’t already have one, and make sure he\nor she is current on the latest technological developments in your field. Even\nthough you may not be able to afford all the latest equipment, at least you’ll\nbe on top of technology trends in the industry and know what your competitors\nare up to — or are capable of.<\/p>\n","protected":false},"excerpt":{"rendered":" Ask any small-business owner what he sees as the major challenges to growing his business, and chances are he’ll say: winning more sales. Ask any medium- or large-business owner what her major challenges have been, however, and she’ll probably say: structural growing pains — putting into place the necessary processes and structure to accommodate a […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[67,23,4,6,71],"tags":[110],"yoast_head":"\n |