For every company founder, the initial period is one of survival and carving out a niche in the market for their product or service. After some time, companies establish themselves to a certain point, they find their customers and they become stable little businesses that can start thinking about the next stage – initial growth.
Unfortunately for many a business owner, this period of initial growth is a very tricky one, with a number of traps presenting themselves more or less openly. All of these lead to mistakes that can not only slow down growth, but which can undo everything good that had been accomplished up to that point.
Today, we will be looking at these mistakes and how to best avoid them.
Once you establish that your company has room and opportunity to grow, you need to be careful. It is in the human nature to start relaxing and to start wanting more and more.
So, instead of hiring six more people, some growing business owners decide to take on ten. Instead of expanding to just one neighboring county, they go for four. Instead of moving into an office space that is just bigger enough to handle their six new employees, they decide to go lavish and they end up wasting huge amounts of money on the kind of office space that they really do not need.
Even more disastrously, instead of sticking with small business loans that are provided by companies like ALC Commercial, they get into long-term deals with banks that only become a burden down the line, a burden that cannot be easily shed.
Do not rush into things. Think long and hard about all the effects your new decisions will have on the state of your company as is and as it will be in the future.
Rein in your appetites. Stay smart.
Usually, when a company grows, one of the first things to do is to hire new people. There is more work to be done and new people need to be hired to take care of this work. Since the company already has a way of doing things, this cannot stay the same type of hiring that was done in the earliest days – the chaotic, “maybe they’ll work out” kind of hiring.
A growing company cannot afford to hire people without a structured hiring process. If you choose to do so, you will end up with employees that take forever to actually become productive and, what is perhaps even worse, with employees that disrupt the way your existing employees have been doing things.
Because of this (and also because hiring the wrong people is super expensive), you need to come up with a structured hiring process where you know where to look for talent, how to make initial cuts, how to interview, how to hire and how to onboard.
Getting Set in Your Ways
One very common mistake that growing business make is that they become stagnant. This is perfectly understandable. They are growing because they are doing something correctly and their owners become afraid of rocking the boat. They believe that if they continue doing exactly the same, they will grow further and they will be problem-proof.
This is simply not the way in which the world of business works. Something that worked for a company that employed five people will not work for a company that employs 25. The way you handled your 8 accounts cannot be easily translated to 28 accounts.
Different phases in a company’s life require different ways of doing things and thinking that you have cracked the eternal business code on your first try is pure madness.
Your business practices need to evolve as your business grows. A business strategy is not something you decide on once and then stick to it come rain or come shine. It is a fluid concept.
Trying to Oversee Everything
There is a reason why middle management exists. It is not just because someone thought it might be a good idea to have a few people earn a bit more because they are a bit more capable than other employees.
Middle management is there because, at one point, it becomes impossible for a single person (you, the business owner) to take care of everything. There are limits to what a single human being can oversee and (micro)manage. Even the history’s greatest micromanager Napoleon needed his Berthier.
Once your company starts to grow, it is time to start thinking about introducing managers or at least team leaders who will oversee different teams within your company. Sometimes you will promote from within and, other times, you will go outside for managers who will have more experience at exactly the tasks you need them to handle.
The important thing is that you find yourself some help.
Getting Obsessed with Competition
In your company’s earliest days, you actually spend very little time thinking about your competition. Sure, you try to figure out what it is that your competitors are doing right and what you can learn from them. Still, day-to-day survival occupies most of your imagination and you lose track of what your direct competitors do.
As you grow and as you start getting more and more in contact with their customers (and they with yours), you suddenly become almost physically aware of their existence and the role they are playing in the fortunes of your company.
Some owners of growing businesses become obsessed with their competition, tracking their every move, analyzing every decision and spending days trying to come up with ways to beat them in some insignificant ways.
You should never lose track of what your competitors are doing, but you should also avoid becoming too engaged in what they are doing every single day. They are trying to do the same thing you are and copying them will very rarely do very much for you.
Instead of becoming consumed by some sort of a mythical rivalry, put your head down and do some smart business.