Building a business is an enormous task that requires nearly unimaginable investments of time and effort on the part of the entrepreneur. Because of the sheer scale of the effort, business owners often fall into patterns and habits that help them manage their day-to-day work lives. This is completely natural, and helps people to psychologically manage stress, but that doesn’t mean it’s good for business.
As businesses become established and begin to grow, business owners need to be aware of their habits, and reexamine them to eliminate those that might hold them back in the future. Many of the instincts that initially helped your business survive could eventually begin to get in the way and hold back progress.
1. Excessive task management
As a business owner, you are ultimately responsible for everything your business does or doesn’t do. Early on, that often means that entrepreneurs have to organise, directly oversee, or even do everything in their business. This level of control is exhausting, but also rewarding when the business finally gains traction. Unfortunately, that’s exactly the time when business owners need to start viewing their responsibilities more abstractly.
As your business grows, it quickly becomes impossible to keep track of everything that’s going on and that needs to be done. Entrepreneurs who insist on continuing to micromanage at this point often create bottlenecks that interfere with productivity, and ultimately prevent growth beyond a certain point. While the responsibility for your business’ success always ultimately comes back to you, the way you facilitate that success has to change. To get out of those early startup stages, you have to take a step back, and become a strategist more than a direct manager.
You’ll need to ensure success by providing your business with competent and properly trained middle managers who will organise and oversee various areas of responsibility on your behalf. This allows you to more generally oversee a larger enterprise, while giving you the freedom you need to focus on your company’s direction and future.
2. Being financially overcautious
Business owners need to manage financial risk very carefully to avoid falling into serious debt and potentially becoming insolvent. However, that does not mean saving every bit of profit for a rainy day, and shying away from financing in all but the most dire circumstances. Making good financing decisions is about determining how well specific investments will pay off in the future, and weighing those returns against potential risks.
Significant growth opportunities are often only available for a relatively short time. For example, a new, very large client might potentially double the size of your business overnight. However, to accommodate them you’d need to invest in new equipment, a larger space, and training new employees. Using financing to increase your capacity would make perfect sense, provided that you can be assured that the new client will stick around long enough to return that investment.
3. Focusing only on one central product
New businesses usually rely on a single product or service. Often, entrepreneurs build on a single innovation to create their businesses in the first place. As these small businesses develop, however, this hyper-focus can become debilitating. While it’s extremely important to optimise an existing product, SMEs often miss out on potential growth opportunities by not diversifying their offerings over time.
As one product or product line matures, you’ll need to look for new ways to innovate and provide solutions for your customers. That might mean offering complementary services to your original products, or perhaps adapting proprietary innovations to new uses that target entirely different markets. While this is certainly primarily a way to drive growth, it’s also a critical part of ensuring your business’ long term stability and viability. If a competitor were to negatively impact your success with a product, or if a product simply became less popular due to cultural or seasonal factors, you’d have a variety of other options to fall back on.
Your business’ needs change over time. The habits and attitudes that helped to make your startup successful two years ago, may not be beneficial in the long run. To be successful, business owners need to evolve to meet those needs and to facilitate growth and progress. For most entrepreneurs, that means reexamining your role continuously, and determining how exactly you can best serve the interests of your growing enterprise. By doing so, you’ll build a more stable and resilient operation that can better take advantage of its growth potential.