As your business grows, it also needs to “grow up”. Growing Up is about professionalising the business and abandoning working practices that may have served you as a small company but no longer serve you as a mid-sized company. Ultimately, it’s about acting like a “small big business” rather than a “big small business”. Here are 6 key transitions you need to make to achieve this:
1. Work “On” not “In”
As a business owner, you are on the payroll to develop and grow the business profitably. Nothing else. Are you therefore engaged in high-value activities on a daily, weekly and monthly basis consistent with doing this? If you’re working “in” the business then you’ll almost certainly be not. Don’t remain trapped in an employee mind set by working operationally. Instead, remove yourself from activities that are dependent on you so you can work strategically and “on” the business to drive its growth.
2. See the value, not the cost professional advice
As your business grows, it’s financial and tax complexities, trading risks and commercial challenges will all increase and you will need more sophisticated advice to help you navigate these. It’s common for small companies to see professional advice as a cost and not an investment. In some cases, this can even spill over into a suspicion of professional advisors and it’s important you break out of this mind set. All successful growth businesses have exceptional advisors around them. Good advice doesn’t just save you money, it actually pays for itself.
3. Have a clear growth plan
If you don’t have a clear growth plan, you’re likely to be operating very tactically – chasing your tail from one year to the next. The professionally managed business has a clear growth roadmap with actions, accountabilities, milestones and metrics that are owned by the Board of Directors and devolved into the business. Progress against plan is measured monthly and quarterly and strategy is re-evaluated at year-end in advance of the coming year.
4. Use board-driven decision making
Do you have monthly Board Meetings that drive decision making in your business? Owner-managed businesses often fall down in one or both of two areas here: 1) the owner resists relinquishing control and continues to make decisions unilaterally, even when there are other Directors in place and 2) the business has Directors but fails to have Board Meetings. A professionally managed business has effective monthly Board Meetings from which decisions and actions flow.
5. Have clear metrics
Do you know exactly where you are on your key numbers? It doesn’t matter whether its hours billed per day, units of production, throughput or something else, the point is you can’t run a larger business on gut feel. The second point is that your management information should be available in real-time so you can make effective decisions and you know exactly where you are on the areas of your business that are critical.
6. Develop an operations manual
In many owner-managed businesses, all of the ideas and know-how reside within the owners head or with the key people. In a professionally-managed business, processes and systems are written down and standardised and the business works in clearly defined ways – whether the owner is there or not. Think about creating an Operations Manual for your business so that you can template and systematise recurring tasks and ensure things happen in a consistent way.
Professionalising your business is about enhancing it, rather than making it more complicated. It’s the next logical step in your growth journey as you move towards becoming a bigger and more successful business.