How you manage growth can make or break your organization.
Business ownership has never been for the faint of heart. Ongoing change and adaptability are part of the success equation. Even when things go well, there are problems you will have to navigate. As you grow, you and your company should be ready for these issues:
- You will feel out of your depth as the leader and need to significantly invest in your professional development and/or eventually turn the reins over to someone else.
- You will outgrow the capacity of your current people to perform in their roles, and you will need to upgrade their talent in critical positions.
- You may outgrow the knowledge bandwidth of your current professional service advisors (e.g., tax, legal, IT, etc.).
- You will experience periods of significant pressure on cash flow to keep up with the increased volume and infrastructure building requirements.
- You will begin hiring administrative people who don’t generate revenue and constitute an overhead expense, which will put increased pressure on margins.
- Your current bank may be unable to or not want to service your changing financial needs.
- Your business model will be challenged by operational problems related to scaling up to match volume and replicating systems/processes.
- You will change your definition of an ideal client relationship and may have to walk away from clients who have served you well in the past.
- There will be pressures to expand your product/service line and/or expand geographically.
- Your competition may change, and regardless, they will become more aggressive in their tactics.
- You will lose the personal connection with your employees, and there will come a point where people are hired that you don’t know and may never really interact with
- You will spend increasingly more of your time on symbolic leadership and big-picture issues and feel far removed from the tangible day-to-day operations.
Leadership is about reinvention. The typical leader needs to reinvent himself/herself every 5-7 years to tackle the new challenges of the role. To maintain a trajectory of success, you will also need to make difficult yet necessary decisions. Of course, you have the option to halt growth, slow down, and transform your business into a lifestyle business, but this approach comes with its own set of challenges that we will discuss in a future blog. The good news is that many people have blazed the path ahead of you. There is much you can learn from them and do to tackle these and many other challenges.
Related Articles:
- The Challenges of Growing a Business and How to Meet Them (infoentrepreneurs.org)
- 6 Growth Challenges Your Business Will Face (inc.com)
- 7 Business Growth Challenges To Anticipate and Overcome (sage.com)