Managing a Growing Business

Once a start-up business is up and running, how does an entrepreneur manage it? Often the entrepreneurial spirit of self-confidence, creativity, focus and control leads to financial and personal grief as the enterprise grows. A hands-on entrepreneur who gives birth to the business loves perfecting every detail. But after the start-up, continued growth requires a shift in management style. Those who fail to adjust to a growing business can be the cause of the problems rather than the solution. In this article, we will look at the stages through which entrepreneurial companies move and consider how managers should out their planning, organizing, leading and controlling.

Stages of Growth

Entrepreneurial businesses go through distinct stages of growth, with each stage requiring different management skills.

1. Start-up – In this stage, the main problems are producing the product or providing the services and obtaining customers. Key issues facing managers are: Do we have enough money? Will we survive? Can we get enough customers? Many Internet companies are still in the start-up stage.

2. Survival – At this stage, the business has demonstrated that it has a workable business entity. It is providing a service and has sufficient customers. Concerns here have to do with finances—generating sufficient cash flow to runt he business and making sure revenues exceed expenses. The enterprise will grow in size and profitability during this period.

3. Success – At this point, the company has a solid base and is profitable. Systems and procedures are in place to allow the owner to slow down if desired. The owner can stay involved or consider turning the business over to professional managers.

4. Takeoff – The key problem here is how to grow rapidly and finance that growth. The owner must learn to delegate, and the company must find sufficient capital to invest in major growth. Properly managed, the company can become a big business. However, another problem for companies at this stage is how to maintain the advantages of small business as the company grows.

5. Resource maturity – At this stage, the company has made substantial financial gains, but it may start to lose the advantages of small size, including flexibility and the entrepreneurial spirit. A company in this stage has the staff and financial resources to begin acting like a mature company with detailed planning and control systems.

Planning

In the early start-up stage, formal planning tends to be nonexistent except for a business plan. The primary goal is simply to remain alive. As the enterprise grows, formal planning is usually not implemented until around the success stage. Planning means defining goals and deciding on the tasks and use of resources needed to attain them. Entrepreneurs have to define goals and implement strategies and plans to meet them. It is important that entrepreneurs view their original business plan as a living document that evolves as the company grows or the market changes.

Organizing

In the first two stages of growth, the enterprise's structure is typically very informal with all employees reporting to the owner. At stage 3, success, functional managers are often hired to take over the duties performed by the owner. A functional organization structure will begin to evolve with managers in charge of finance, manufacturing , and marketing. During the latter stages of entrepreneurial growth, managers must learn to delegate and decentralize authority. If the business has multiple product lines, the owner may consider creating teams or divisions responsible for each line. The enterprise must hire competent managers and have sufficient management talent to handle fast growth and eliminate problems caused by increasing size. As an enterprise grows, it might also be characterized by greater use of rules, procedures, and written job descriptions.

Leading

The driving force in the early stages of development is the leader's vision. The vision, combined with the leader's personality, shapes corporate culture. The leader can signal cultural values of service, efficiency, quality, or ethics. Often entrepreneurs do not have good people skills but do have excellent task skills in either manufacturing or marketing. By the success stage of growth, the owner must either learn to motivate employees or bring in managers who can. Rapid take off is not likely to happen without employee cooperation.

Stepping from the self-absorption of the early days of a company to the more active communication necessary for growth can be tricky for entrepreneurs. You can never get anywhere if you're pulling your staff around behind you all the time. Focus more on employee needs and less on financial growth. Entrepreneurs have to make an effort to communicate with employees, conduct surveys to learn how they are feeling about the company, and find ways to involve them in decision making.

Your leadership style has to allow the company to enter the takeoff stage with the right corporate culture and employee attitudes to sustain rapid growth. Leadership also is important because many small firms have a hard time hiring qualified employees. Labor shortages often hurt small firms that grow rapidly. A healthy corporate culture can help attract and retain good people.

Controlling

Financial control is important in each stage of the entrepreneurial firm's growth. In the initial stages, control is exercised by simple accounting records and by personal supervision. By stage 3, success, operational budgets are in place, and the owner should start implementing more structured control systems. During the takeoff stage, the company will need to make greater use of budgets and standard cost systems to provide statistical reports. These control techniques will become more sophisticated during the resource maturity stage.

Managing a Growing Business - To learn more about this author, visit Rodney Burutsa's Website.

Like this article? Share it with your friends

E-Mail | Print | More

Related Articles
Create an Account Management Team
	In many companies, once a salesperson has closed a deal with a new customer, the day-to-day responsibilities of managing the account are transferred from a sales rep to an account manager. Using this type of struct...
Frustrated Company Owners and Managers
	Don't be part of the problem of your employee's misguided behavior.
Here is a Method For Managing Your Friends In The Workplace - Follow these 7 Simple Tips
	Are you a new manager? Have you been promoted recently to management? Is some of your staff also your friends? Do you know how easy it is to loose all respect when you show favoritism? Here are 7 quick and simple ti...
Are You Managing Paradox?
	What do we mean when we say that management is a paradox? Find out in this fascinating article exploring the true nature of managers and the managed.
Customers Lining Up To Buy From You
	Business coach. As a business coach I show business owners how to get customers lining up to buy from them. In this article I explain several concepts that will help you get customers. Consistently, day in day out. ...

---

Related Forum Posts
	Re: Biz Plan Competition
	My entry
	Personal duties
	Welcome To Our Newest Moderator
	Re: Congrats Shri!
	Exclusive: Interview with Results
	God's Diet
	Managing Virtual Teams

---

Related Businesses - Evan Elite Authors

Dave Kurlan Dave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website

David Barr David Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website

Accessible Business Consultants Dave Turkin, President, of Accessible Business Consultants is a full service business consultant that has over 32 years of experience working with small-medium size businesses. Dave has designed and implemented numerous business and marketing plans, designed internal programs for accounting and operational procedures. He has analyzed businesses and prepared strategic plans setting budgets for growth, expansion and business restructuring. He currently sits on the Board of Directors of various corporations as an advisor. For many years he has been the Business Coach to many executives offering advice and guidance from old and established companies as well as new companies just getting started. Dave has the ability to analyze a business quickly and get a strong indication as to the necessary steps to improve operations, productivity and profitability. - Visit Accessible Business Consultants's Website

Jeff Foster WebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. - Visit Jeff Foster's Website

Vwodek Wojczynski Business Coach and Consultant Vwodek Wojczynski (pronounced Voy-chin-ski) brings fun, awareness, accountability and fresh perspectives based on his diverse experiences in life and business. Born in Poland and educated in Greece and Canada, he is trilingual with 8 years experience in business development with clients in Canada, USA, Switzerland and Poland. His approach is systematic and process-driven. He fuses the know-how of proven business methods with his commitment that entrepreneurs experience satisfaction and joy based on their values, motivations and strengths. He believes that businesses succeed based on their ability to generate value by providing what’s needed and wanted. Ultimately, he trains executives and true business owners - people who work less, produce more, own businesses that run automatically after a while and make a difference globally. His current research focus is the development of intelligent business systems and the application of emerging artificial intelligence technologies in business. He is also an avid traveler, spoken word performer and visual artist. He resides in Toronto, Canada. - Visit Vwodek Wojczynski's Website

Anne Barr Anne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website

Leanne Hoagland-Smith Are your sales where you want them to be? Will you be one of the few who achieves sales success or one of the many who have failed to change? So what are you doing to change those results? Let’s be honest, with companies moving globally and at lightening speeds, the traditional business solutions are outdated and dead. My approach moves your business out of its comfort zone and secures your competitive advantage now. If you are seeking to increase sales, build customer loyalty, create a culture of great attitudes or just achieve some sleep filled nights, then we should talk because my clients have experienced exactly those types of results. Learn more about customer loyalty at http://www.processspecialist.com/customer-loyalty.htm Give me a call at 219.759.5601 for a free strategy session. P.S. If you are seeking a motivational speaker, sales trainer or small business expert that will leave your audience smiling and remembering, please feel free to contact me at 219.759.5601. - Visit Leanne Hoagland-Smith's Website

Kim Castle With nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website

The Evan Elite Authors program is currently in beta phase. For details please contact us.