Small Business Management: Stimulating and Managing Rapid Growth
Business Base Camp
Around 5-7 years after start-up you will reach business base camp. It’s a great place to be. You know you’ve reached base camp when you have:
- A core team of staff that are competent and you have confidence in their capability.
- Cashflow has stabilised, you spend less time worrying about money and can plan for the mid to long term.
- Your reputation precedes you; word-of-mouth referrals are flowing.
- Some of the essential business systems are in place making the business easier to operate.
Reaching base camp is a milestone achievement in itself but do you want to stay there? If you would prefer to start heading for the summit then this workbook is for you.
Heading for the Summit
A very different style of leadership and management is required to successfully take your business to the pinnacle of its potential. As you move higher up the mountain:
- The risks increase
- The complexity of decision making increases as more variables come into play
- You no longer know all that’s happening at any given moment in time
- The business becomes thirstier for leadership.
Consider our Business Growth workbook your guide for the journey ahead. Here are some of the insights offered in the workbook written specifically for small business owner-operators in Australia.
Intuitive Decision-Making Works…to a Point
Most business owner-operators and successful managers have powerful intuition. Often the initial reason for starting the business was based on “gut instinct” rather than any hard evidence. Early staff appointments are also based on an intuitive sense of the right personality fit and skills. Owner-operators are able to make successful business decisions in this way because, at the early stages, they have a systemic view of the business. They can sense how all the pieces need to come together without necessarily being able to articulate it. Their systemic view is created through being hands-on with all aspects of the business.
As the business grows it’s nearly impossible to be hands-on with every aspect of the business. It can also be highly detrimental to success. When the business starts moving in this direction intuitive decision-making needs to be supplemented with other forms. When the business owner can’t be across all that’s happening then data needs to be their eyes and ears. That data is generated and analysed through a Strategic Management System.
Delegate Budgets and Monitor
When you set a budget you’re essentially telling the team they can spend up to ‘x’ amount on a particular activity. Some of those expenses will the strategically significant to your business (such as employees, computer systems, promotion) others are simply consequences of doing business (such as stationery). As a principle, delegate responsibility for those expenses that have little strategic significance and maintain senior management accountability for those that do.
Your role is then to monitor expenditure against those budgets. You may need to review data weekly, monthly or quarterly depending on the nature of your business. Look for discrepancies (above and below) budgets and ask questions of those who have contributed to the performance.
Business Plan: Do You Need One?
A formal business plan is not always essential. The primary role of a business plan is to consolidate and clarify thinking. Business plans are most effective when treated as an opportunity to nut through how things are practically going to work and how all the pieces of the puzzle fit together. Think about your business as a boat in a major yacht race such as the Sydney to Hobart. The questions you would ask are very similar.
Now here’s the twist. We’re not so interested in whether you can answer these questions. More importantly, can the other stakeholders in your business (e.g. staff, investors, suppliers) do the same? A failure to document your thinking limits the ability for it to be transferred to someone else. If your team and other vital stakeholders don’t know where the business is heading, then how can they help you get there?
EWO Business Growth Workbook
There are 2 sections to our 33 page Business Growth workbook.
Part 1: Insight
You will benchmark your current management skills and identify strengths and weaknesses. You can compare your answers to those provided by 382 other Australian small business owner-operators and managers.
Part 2: Action
You will gain an understanding of the 4 key management and leadership shifts you need to make and how to make them. There are specific activities and questions to stimulate thinking and get you moving.
The workbook can be purchased form the EWO Website (http://www.eyeswideopen.com.au/pages/Business-eBooks)
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