The transition from a start-up to a more mature and sustainable company is one of the more difficult times in any business’s lifecycle. Leaving behind the trappings of the scrappy upstart as a more stable and mature business emerges can challenge the business owner in ways they may not have envisaged.
But it’s an unavoidable stage and one that – if handled properly – can set you on your way to long term success, with the right systems and processes in place to support sustainable growth. But once you’re at the tipping point, picking the right path to follow can be tricky.
Here are five key lessons to keep in mind as you move to the next level:
Delegate to accumulate
‘It only takes me 5 minutes’; ‘It would take me an hour to teach someone’. Common laments from the business owner reluctant to delegate important work to employees. But fail to overcome that and you’ll still be doing the little jobs in five years’ time. Moving to the next level requires a big mindset shift: and the first step is to see yourself as someone who does nothing except lead other people, and help them do things and take responsibility. And for that, you need to find the right people and empower them.
But how to find them? As you grow, it’s not unusual for the business owner to become detached from some parts of the business. Many successful businesses at this stage find it better in the long term to look for potential over experience (unless they need a specialist). And even if you don’t pay the most, you can still look for people who have talent and perhaps haven’t had the opportunity to demonstrate that. It may take a little longer, and you might have to see a lot of people, but taking the time to find those who fit with your business’s needs.
Knowing when to ease off the accelerator is a crucial lesson to learn, especially if more opportunities start to pop up. It’s worth remembering that typically, businesses don’t fail because opportunities don’t present themselves: they fail because they run out of cash. And it’s surprising how quickly you can get squeezed on cash after a big investment – payroll seems to come round quicker every month, so make sure you don’t bite off more than you can chew. So, talking to your accountant before taking the plunge is a must.
Walk on by
Failed deals happen all the time; the key is to learn from those failures because they can offer a big lesson. Perhaps the chemistry was wrong, or the scale or scope of the arrangement wasn’t right for the business at that time. Walking away from a deal isn’t a crime, and it’s worth remembering that just because you start something you don’t have to see it through. So, if it’s not right then walk on by. A business deal can be a little like buying a house: if the survey reveals something then it’s important to walk away. And by doing that it may mean that you have the necessary investment ready for when the right one comes up.
Get your systems right
The really important one: making sure systems are future proof. When your business is growing, it’s often a temptation to see the new business and growing demand and simply plunge in and say, ‘Yes, let’s do it all!’ However, if you don’t plan properly you may find yourself 18 months down the line you may find your systems aren’t fit for purpose, leaving you facing a major transformation exercise. So work with your advisers to make sure your systems – accounting, HR, payroll, etc – are able to flex and grow with you.
As experts in the field, we work to help our clients to decide what’s right for them as their business grows. We’re here for whatever you need, and you can contact us for help and support in a number of areas, from tax and payroll to accounting and banking.