Many proprietary companies grow fast in their early days but more often than they reach a plateau. Growth slows down, if there is anything, and profits also do. Many entrepreneurs are satisfied with this, or say they are, especially if the business generates enough profit to be comfortable.
There are a number of reasons for the growth of a company to settle. The more obvious reasons, such as not finding enough new customers or price sensitivity on the market, are often symptoms of other obstacles in the business. This is not an error in the business, rather, restrictions that are more or less inevitable given the systems and structures needed to run a certain size company.
A small company revolves around the owner. All decisions must be taken by them or run past those who cause a bottleneck in the company. Operations are becoming increasingly dependent on the owner as employees stop making decisions. Ever heard a business owner say I wish I could find staff who would use their initiative? It is often a symptom of the owner who makes all decisions. As a result, their employees do not feel that they are supported to make their own decisions or take risks or two that would benefit the company. As business grows, it is increasingly important that issues are addressed by individuals, teams and department heads.
This situation is often complicated by the fact that employees can have strong loyalty to the owner of an owner-driven business. This is amazing, but when a company grows you need more than one leader. If employees are loyal to the owner instead of exchanging trust in the company as a whole and the companys long-term future, then business growth will inevitably be stunted when conflicts arise.
At some point in the development of a company, the owner must spend most of his time on the strategic aspects of growing the business, which means that the day-to-day operation of the business goes to a competent boss. Failure to spend enough time to set the strategys leadership in the business and help the team to produce a realistic action plan to get there is an important reason why companies fail to grow.
While the ownership role is being developed into a more strategic, it limits it to new ideas coming from the owner. New ideas should be encouraged from all employees. The fact is, why not from all stakeholders, including customers, suppliers, alliance partners?
The culture of a start-up activity is, of course, a reflection of the owners values and convictions. This is generally what drives the successful development of operations during the start-up phase. It is therefore quite difficult to give up this. But when business grows, culture must evolve beyond the owner - still strongly influenced by them, but let objections of employees, customers and their shared experiences be reflected.
Small businesses often have their biggest winnings when they go the extra mile to get a job done do something out of the normal routines, think out of the box, take the chance to deliver good service to a customer. If a company is to grow, these situations should be less frequent. You can not continue to run a company through the seat of your pants. The celebration of a good job job must focus on getting systems in place to avoid activity crimes. It may not be as exciting, but it will allow business to grow faster.
When a company grows, the efforts are getting bigger and it will be harder to make decisions that may endanger what the entrepreneur has already achieved. Hiring more people to increase sales, but when current sales do not fully cover employment costs is a major obstacle to growth. The fear of losing hard-earned sales and profits will also stop a company from making bold strategic decisions.
When companies grow, its natural to go through several plateaus - grow until they reach a size supported by their current structures and systems. Each time this point is achieved, the structures and systems need to be developed to support a larger organization, otherwise the business will fall and eventually fade.
This is a natural process. A small company with three people can not be run in the same way as a global conglomerate with several billion pounds. Even if you think that your business becomes one, you must start with business systems that support your business today and the near future, not those who support sales of several billion pounds.