Growing pains: The stress of success in small business
Monday, September 24, 2018/
I raised a few eyebrows at a meeting last week when I said I thought it was easier to work in the startup space than grow an established small business.
The longer I work with business owners who have had their venture for a few years the more convinced I am of this. We know from small business growth research that founder skills need to change over time as the business grows. This is the primary reason why I think growing an established business is harder because the strategy and daily tasks change as the business matures.
I’m not saying that startups are easy. Far from it. However, successful startups are innovators, disruptors and usually passionate about their idea, which in turn fuels high energy levels. Business owners who have established small businesses are often the same, but they may no longer enjoy blue ocean opportunities afforded to those with no track record of sales or profit.
You may have had no real competition at the time of start-up, but given a year or so of trading you probably will. You may have worked alone during start-up but business success may mean you now need help to grow your business. Your initial service or product may have been simple to produce, but now volume increases makes delivery more complex to manage. You may have dreamt of consistent revenue streams and growing profits but now reality records financial results.
There’s an ironic twist to small business growth; the more successful you are, the more stressed you may feel.
The key to adapting to business growth is to remember that as the business develops, so must your leadership and management skills. Most likely, growth needs to be reflected in the founder’s actions as well as in the financials. In particular, skills required to successfully grow an established small business include:
- An ability to plan for growth strategically. Your market may be crowded now; you’ve paved the way for others in your space. How will you differentiate yourself now? What new opportunities can you uncover? What sales strategy can you employ with both existing and new customers?
- An ability to forecast what is needed to fund growth. In particular, having a plan in place and knowing how to do a cash flow forecast helps. Are you self-funding, do you need to apply for a loan or can you access government grants? Having a few trading years to share with lenders may impact on this decision.
- An ability to communicate well. Have you cemented your vision for the business? What values are important to you and the company? How are you sharing that with employees, customers and suppliers? Clear communication helps to ensure that anyone connected to the business knows what the goals are and understands how the business aims to achieve them.
- An ability to enforce self-care routines. Did you start your small business to gain better flexibility in your life? Are you working less or more hours? Do you know how to recruit well? Are you a confident delegator?
If you recognise a deficiency in any of these areas it’s a great idea to seek some help. Sometimes it’s just a matter of re-establishing systems and practices to ensure that growth can be enjoyed and not dreaded.
Great technical skills may have been the foundation for establishing a successful small business, but it’s leadership and strategy skills that pave the way to stress-free growth.
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