Entrepreneurs are a dynamic breed and no matter how much they accomplish, they are rarely satisfied and are usually enthused with a desire to turn their start up into a bigger and better venture. “Taking the business to the next level” is probably the most common way to express it. But as businesses grow, their complexity ought to increase and the business model needs to change to deal with the increased complexity. Many SMEs do not embrace governance in their growth and therefore choke the growth of the business. The challenges include:
- Rigid Management Structure
Management structure remains the same and most often than not, within the family circles. Professionalism is not embraced and therefore the business ceases growing and worse still, go down. The first step for any entrepreneur who wants to grow his or her business into a mature enterprise is to seek guidance and advice from more experienced people. Having an advisory Board with members who comprise professionals such as accountants and attorneys for organizations as well as people from the relevant industry would provide the right direction. Next, actually put into practice what you hear from your advisors. You can get through that process with fewer mistakes if you have advisors who have been through that experience and are willing and ready to advice you.
- Lack of focus
The final decision about what you’re going to do as a business rests with the entrepreneur. It may seem simple, but many owners of young businesses struggle to decide where they should focus and often with undesirable consequences. This is the stage when, so many opportunities present themselves. You think you want to follow this trail and that, but you may be doing something that may not be profitable. You have to focus and learn what to do and not do.
- Lack of Operational Manual
Most business ideas were conceived while on transit, travelling, dining, playing golf… To actualize the business, get your policies, practices and plans outside of your mind and onto paper. Write down how the various business processes in your company need to be done. Once you’ve started writing your company’s operations manual, you’ll find it has many uses, from guiding decisions about whether to take on a particular client to helping you decide who to hire for an open position.
Start-up businesses start with the bare minimum staff, usually the founder alone. But as the business grows, expanding the team becomes a necessity if the business is to be upgraded to the next level. However most companies have the founder playing the roles of multiple employees or recruit family members who most often than not, do not add professional value in the organization. In some instances the first employee is hired or employed both as a big commitment and as an essential one. Once the recruitment is done, allow them to work. It is you as a boss who has to allocate the work and this is not so easy. Start by delegating functions you’re comfortable letting go off, or those you are least uncomfortable relinquishing.
- Lack of expansion
There is the temptation to stagnate the business especially when the income can cover the basic costs. Whatever “taking it to the next level” means to you, make an effort to explore it, and don’t stop with the first benchmark that occurs to you. Pick a next level that challenges as well as inspires. What great entrepreneurs ultimately want is sustainable business growth. They want a company that has infrastructure. And ultimately, they want one that can operate efficiently on its own, even if they are not physically present, all the time. Even while you are sharpening your focus and leaving distracting ventures behind them, entrepreneurs trying to take a business to the next level also need to expand to different markets, products and channels and additional locations.
- Funds to fuel the growth
Many entrepreneurs successfully manage the finances of their ventures through the start-up phase, only to be stopped in their tracks by the need for additional capital. Getting outside funding is a problem for many entrepreneurs because lenders and investors want a say in how the business is run. Often, the new capital has strings attached. Lenders may require that the debt-to-asset ratios stay below a certain level, while equity investors may ask for a seat on the management board. These are both important reasons for having a board to begin with, learning to work with it and getting comfortable with letting go off some authority.
Achieving profitability relies largely on successfully going through first steps mentioned above: Focusing on the core of the business helps you avoid unprofitable distractions. Building an advisory board prepares you for sharing control when you bring in outside investors. Profit tends to take second place to revenue in many entrepreneurs’ plans. This is not wrong, as long as profits do not get ignored. You should give equal attention to both. Set multiple milestones so you are not focused solely on sales. You could end up making a lot of sales but not being profitable.
- Entrepreneurial Learning
Think big. Think bigger than you actually are and act bigger than you actually are. Whatever your company is, you have to do it faster, bigger and better. Reaching the next levels is entirely the result of your effort, imagination, innovation and determination to grow.