Does this sound familiar? After growing at a rapid rate for the first few years, your company has hit a plateau—and you can’t get out of it. At the same time, you’re sure the economy isn’t the main problem. Something else is affecting your company's growth
How to dig your company out of that rut and hit the next level? It’s best to understand these three common roadblocks that stop small company owners from growing—and how to address them.
In the beginning, as a rule, small business founders have their fingers in just about everything, from sales to billing. The problem starts when the company grows and owners can’t stop from staying involved. That means constantly giving directions and instructions to employees about how to complete their jobs—and sometimes taking over those tasks completely. “If a salesperson has to come back to you for approval for everything he does, you become the choke point for deals—and you’ll inevitably stunt company growth,” says Ingar Grev, CEO and head strategic coach for The Growth Coach of the National Capital Region, a strategic business coaching and consulting firm in Washington, D.C. The result: You don’t spend time on the most productive tasks and you inhibit employees from learning how to work efficiently.
Case in point: Grev recalls a $4 million service company with an owner who couldn’t let go—insisting, for example, on spending his Fridays doing his own payroll rather than allowing office staff to do the job or outsourcing it. The upshot: company growth stalled.
Best move: It’s an absolute must—pull yourself out of the day-to-day operation of the business and start empowering your employees to take more responsibility for appropriate tasks. “Sometimes the best thing an owner can do is get out of the way,” says Ken Gaebler, a small business expert who heads Gaebler Ventures in Chicago.
One approach is to figure out how much your time is worth—that is, what your per hour value is—and whether the tasks you’re focusing on deserve that kind of pay. “If your time is worth hundreds of dollars an hour and you’re doing bookkeeping, it’s not appropriate,” says Grev. Generally, business owners need to concentrate on high-end business development
and strategy, according to Grev, using salespeople to close routine sales.
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Then, when you’ve determined where to spend your time, you need to allow employees to take charge of other tasks, without telling them what to do all the time. “Let them get the job done on their own,” says Grev.
To make sure the new system is working—and also to get peace of mind—use metrics that measure whether employees are on track. Grev points to one client who was concerned about the cleanliness of his facilities and correct use of equipment. So he empowered his COO to oversee those issues and included relevant performance metrics for evaluating that individual.
The tell-tale sign you’re succeeding: You can go on vacation and feel confident about leaving the business in your employees’ hands while you’re away—without checking your Blackberry every half hour.
2. Hiring the wrong employees
Fact is, no matter how much you want to delegate, you won’t succeed if you have the wrong people on staff. “When everyone does what they’re told, you can hire anybody,” says Grev. “But when you want to create a growing organization, you’ve got to get the right people.”
Best move: Those performance metrics should help. Grev cites a client who discovered, after putting in place new measurements, that a long-time salesperson simply wasn’t up to snuff. With products that took three years or so to sell, the individual wasn’t closing on enough leads. As a result, the client let the employee go.
Of course, that’s easier said than done, especially if the person has been with the firm from the beginning. Plus, it’s a lot more expensive to hire new employees than to train existing ones. For that reason, you also need a system for coaching staffers who seem not to be cutting it and giving them a chance to improve.
Then, evaluate your hiring approach. Look at every job and be clear about the skills and personality traits needed to do it well. You might consider hiring an outside human resources expert to help.
3. Poor planning
Many small business owners fail to create a blueprint for success. But, once you get to a certain level, that won’t cut it. You need a plan—period. That means both an overall strategic vision, as well as a business plan with more nitty gritty details. “To get to the next stage, there has to be a formula for growth,” says Gaebler.
Best move: Leave the office and work on a three- to- five- year strategic business plan that includes a vision for how to increase business, along with how to allocate your resources, specific steps that need to be taken to achieve goals, and who will be responsible for what. “A plan will help your people understand everything from where to make key hires to how to focus marketing efforts,” says Grev.