As a business grows and expands so does its associated needs. These needs have to be managed correctly to achieve long term success.
Our top tip for you to remember is your business will not be able to grow successfully by doing everything yourself. You are not a superhero, no matter how much you wish to be! You will not be able to scale up your business whilst carrying on doing the same role as you did when you started off. You need to give some of your work to other people – delegate.
Over the last 25 years we have grown many small businesses into profitable businesses. Read how we worked in partnership with a design agency owner to double the turnover in 4 years. Read the One Ltd Case Study
Using our experience we have compiled a few pointers to help support your business growth avoiding the common pitfalls.
1. Team Leaders /Middle Management
At the start up phase of your business you undertake every job. As your business grows further and you take on additional staff, you still need to monitor every function. However when you grow beyond 10 employees, it becomes too complex for you or your founding team to keep managing all staff members. At this point you face a choice – to continue trying to run things directly, and risk spreading yourself too thin, or to recruit a middle management or team leader level.
If you decide to continue as you are then you will limit the growth of your business. You will be overworked, stressed out and likely to make poor decisions.
If you don’t like the idea of your business becoming too hierarchical, you could promote a team member to a team leader. These team leaders can then take some of the day to day decision making and staff management load off your back, as they have the collective expertise to consider all aspects of an issue and take broad decisions.
2. Internal Recruitment/Promotion
We would always recommend you look internally when delegating or recruiting. Is there anyone internally capable to handle the day to day operations and lower level management issues who has the capabilities, skills and enthusiasm?
The advantage of internal delegation or job changes are endless – they understand the vision, part of the culture, no delay in settling in, motivating for the staff member, demonstrates career progress within the company. Of course, if there’s no one suitable then you may need to think about recruiting externally.
3. Effective delegation
As a small business owner, it can be emotionally difficult to step back and delegate. You need to allow your management level/team leaders to use their judgment and avoid saying things like ‘I wouldn’t have done it that way’.
To ensure this is effective you need to think about:
- What work/decision/responsibilities you are passing on
- What type of people do you need
- How are you going to select them – internal or external
- Does this involve job changes/description/pay increase
- Train and develop
- Set objectives, measure the output and give appraisals
- Decide on appropriate level of ongoing reporting
4. Knowing where you add value
Setting up a one or two team leaders will take the pressure off you, allowing you to effectively delegate the day to day operations. This will then allow you to slot into the role where you are adding the most value to the business – this is often a higher level role that make you direct money such as the sales/marketing function or relationships with customers.
Whatever you focus your time on, make sure you enjoy it – else it will become a burden.
5. Monitor closely your cash flow
With an increase in staff costs you need to increase your sales to finance your team. You need to focus more now on business development, marketing, client profiling and pricing to increase your sales. This is where many of our clients struggle and how CMC can really add value to business owners. We can mentor, coach and support owners in their decision making, providing them with the knowledge and skills required.
Cash flow is the lifeblood of your business. Ensure you keep a close eye on your cash flow on a daily/weekly basis. A cash flow forecast will give you a good idea of how much money you have coming in and out of the business. Click here for tips on how to tighten you’re your cash flow . Growing too fast and not having the cash flow to support the growth will have a negative effect.
6. Raising finance
If your cash flow is getting tight then act quickly before it’s too late. Ask your bank manager before you need it, instead of when you need. Banks hate surprises!
Too many business owners we talk to have been disappointed in their efforts to raise cash– but often this is because they’ve asked the wrong people the wrong question. It is crucial that you are clear about why you need to raise money and then match this to the right type of funder.
Click here to read our raising finance guide to help provide an overview of your options and the process.
If you wish to grow your business but find the above daunting then please do get in touch as we will be able to help you increase your profits. CMC have partners throughout England, giving you a local adviser in your location. All our partners have hand on experience of running a business as they are all running their own business within a business.
Call us on 01494 829181 to arrange for a free confidential appointment at your business or in your local area.