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7 Mistakes To Avoid When Scaling Up Your Green Biz

Guest post by: Stefan Doering

Article Overview: Growing a green business is exponentially more difficult than a "traditional" business. They have much more to worry about than just being profitable. Environmental and social concerns are crucial to their success. Learn how to avoid making the top seven mistakes when scaling up your green business.

7 Mistakes To Avoid When Scaling Up Your Green Biz

This past week I’ve been meeting some really great green alternative energy companies. My team received over 200 e-mails recommending these businesses for the possibility of being videoed by Planet Forward for broadcasting. The best of which will air country-wide on PBS.

As I’m sorting through all of these green companies, I have been speaking with some of the founders/CEO’s about their businesses. Super cool concepts and technologies that inspire the bejesus out of me and my staff. And many of them are growing like crazy.

For some of the rapidly growing companies, I advised them on how to scale up without losing their vision and passion for the environment and their business.

With them I shared seven mistakes I made when scaling my green company in the 90’s:

Mistake # 1

You think you have the best green product/service in your industry.

While that may have been true when you started, things change. And these days, quicker than ever.

It is difficult being the best. Ask any top athlete, be it Tiger Woods, Roger Federer or Michael Jordan. When you’re at the top, everyone wants to topple you. You become a big target. They study you, watch you, and learn all your moves.

That is why many of the “best” become shooting stars. Instead of staying focused on staying the best, you can become high on yourself and all the crap others feed you about how great you are.

And then one day you wake up to the news another company is now #1 in your industry and you wonder how that could have happened.

Mistake #2

You think you can scale up easily without selling out

One of the hardest things to manage as your company grows is sticking to your environmental and social ideals.

As you grow the playing field changes, often dramatically. What you were once able to do when you were smaller, you can no longer do at all or as effectively. Either because your company is too large or because you now have people working with you that have different priorities or views in regard to your ideals.

So you reluctantly decide to go make exceptions to your original vision in order to accommodate your growth.

Mistake #3.

You believe your investors will let you play your own game

When you first start out, you most likely get funding from family and friends. They invest or loan you the money because the love and trust you.

You get comfortable in your roll as decision maker and you try to keep them updated on your decisions and the direction you are take the company.

But the next round of funding is beyond their reach. Now you bring in more seasoned investors. Your grand visions of the company are OK, but how you get there are not necessarily in alignment with what they think.

You agreed to give these investors seats on your board of directors. Being the guys with the wallet, they might be able to persuade other board members to their way of thinking.

Now you have a dilemma. Either play by your rules and risk being fired by the board, or you play by theirs.

It no longer is your game.

Mistake #4

You're convinced your team will follow you to the ends of the earth

In the beginning, it’s you against the world. And those crazy enough to follow you and your dream to save the planet are completely on board with you. You envision you will all grow old running this company together.

As your business grows, you now have growing staff, customers, suppliers and the related additional responsibilities not there before. What you used to do by the seat of your pants you now need to have an “operations manual”, hiring and firing policies, budgets, shareholders meetings, policies and procedures, and a growing list of demands from outside forces to be dealt with.

For some of the original team members, it is no longer appropriate to have them working with the company. And it could be a mistake to keep them.

And for others, they may conclude the company is not what it used to be. It is no longer you against the world. They have a hard time adapting and accommodating the shifts.

So they leave. And a piece of you and the company leaves with them.

Mistake #5

You think things won't change as your company grows

One of the biggest mistakes entrepreneurs make is when your company starts to grow, you think you will stay the same.

In fact, the more you resist changing as the company changes, the more the company changes… only in the wrong direction.

For example, you decide you will continue to do the bookkeeping since you like doing it and are pretty good at it. Because you are not spending that time looking for new hires to join your team, you soon find your team running around trying to accommodate the additional work load as you grow.

This stresses your staff. They start dropping the ball on the increase in customers you have. Eventually either your staff or customers quit as you are not taking care of either.

Mistake #6

You're sure you'll always stay in charge

Sometimes it gets lonely at the top. As you grow, you will make mistakes, mainly because you are exploring new territory and might not have an experienced person to turn to for advice or guidance.

So if you don’t know your own exit strategy from the business, you could actually take down the whole company. Having an experienced board of directors helps. Eventually the decision may be that it is time for you to step down and let someone else take over. Someone with the right experience to take the business to the next level.

And if you envisioned running the show until you die, you may be in for a rude awakening.

Mistake #7

You believe that when you're scaled up you'll be sitting pretty

One of the biggest illusions is when sales get to a certain level you’ll be content. Or once you raise this round of capital, then life will smooth out.

In reality what happens as you scale up is your challenges stay exactly the same.

Only just with more 0’s.

For example, instead of dealing with five suppliers for your products, you are now dealing with 50. Or instead of raising $500K to purchase inventory from a supplier, you’re now trying to raise $5MM to buy them.

Your challenges will always stay with you, no matter where you go.

The rude awakening is one day you wake up and realize you miss the good ol’ days when things were much smaller and simpler.

Yet that is the price of playing a very big game.

Conclusion

Scaling a green business is just like scaling any business… only much more difficult. Because you are balancing three bottom lines, not just one.

The solution to maintaining the right balance is the new way of doing business.

In the end you are playing a big game. A game that needs to be played, far beyond just you. For the economy, for the planet and for your community. And by following these lessons learned by those before you, you are more likely to succeed.

Action Steps for the Week:

Make sure you create and incorporate a clear vision for your company integrating your environmental, social and business commitments in a sustainable way.

The key is to build a system for consistency and to manage your mistakes.

And you will make mistakes. If you don’t, you are not playing a big enough game. Just know you will make more of them than the ”single-bottom-line” (traditional) businesses.

The key is not to not make mistakes, rather to accelerate through them.

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Article Tags: Exit strategy, Green Business, green entrepreneurs, green financing, growing your green business, Planet Forward, selling a company, small business, Stefan Doering



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