As a small business owner, you’ve successfully navigated the startup phase.
Congratulations!
Now you’re entering the early second stage, where your business is poised for growth. But with growth comes new challenges. Let’s explore the top 10 hurdles you might face as you transition from an owner-operated model to a growth-generating business. See if any of these feel familiar…
1. Letting Go of the Reins
Remember when you were the chief everything officer? (Or are you still?) As your business grows, you’ll need to start delegating. This can be tough, especially for tasks you excel at or enjoy. But the only way to grow is to start letting go.
Key Challenge: Learning to trust others with responsibilities you’ve always handled yourself.
Great Resource: “Why Your ‘Founder Mode’ CEO Might Be a Problem” by Joe Procopio, Entrepreneurship Handbook, September 19, 2024 (You need both a visionary and a tactician)
Great Books: Traction: Get a Grip On Your Business by Gino Wickman
The E-Myth Revisited: Why Most Small Businesses Don’t Work and What To Do About It by Michael E. Gerber
2. Effective Delegation
Delegating isn’t just about assigning tasks. It’s about clearly communicating expectations, providing the necessary resources, and empowering your team to make decisions.
Key Challenge: Developing a system for effective delegation that maintains your standards without micromanaging.
Great Resources: “When You’re Too Much in the Day-to-Day” video from Lou Mosca from The 21 Hats Morning Report from August 9, 2024 (“Potential buyers look for businesses that operate smoothly without overly relying on a single individual, so it’s essential to address this issue early on.”)
“4 Steps to Effective Delegation for Busy Business Owners” blog post from Decisive Minds that I think is excellent (1. Follow my lead, 2. Research & Report, 3. Do It and Report, 4. Do It)
Great Books: Buy Back Your Time by Dan Martell
Atomic Habits by James Clear
3. Building a Strong Team
As you grow, you’ll need to hire employees who can help drive your business forward. This isn’t just about finding skills; it’s about finding people who fit your company culture and share your vision.
Key Challenge: Attracting and retaining employees who can help take your business to the next level.
Great Resource: “Who Should Be Promoted to Management? New Harvard Research Say This Quick Test Will Tell You” – by Jessica Stillman, Inc., October 2, 2024 (Spoiler: Don’t promote people who ask to be promoted – instead promote the people who are good at “assigning the right projects to the right people”)
Great Books: The Five Dysfunctions of a Team by Patrick Lencioni
Start With Why: How Great Leaders Inspire Everyone To Take Action by Simon Sinek
4. Managing Cash Flow
Growth often requires investment, which can strain your cash flow. Balancing the need for growth with maintaining healthy finances is a delicate act.
Key Challenge: Ensuring you have enough cash on hand to cover expenses while investing in growth opportunities.
Great Resources: “Tough Times Can Bring Big Opportunities”, by Ami Kassar, 21 Hats Blog (like talent that was laid off at a bigger company, or an unexpected partnership, or a buy-out of a competitor)
“Financial Forecasting: Its Critical Role in Small-Business Success” by Nick Chandi, Forbes, May 20, 2024
Great Book: Profit Peak for Entrepreneurs: A Practical Field-tested Guide to Maximizing Profit and Optimizing Cash Flow by Peter Baldwin and Martha Carlisle
Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel with Blake Masters
5. Implementing Scalable Systems
The systems that worked when it was just you (or a small team) likely won’t cut it as you grow. You’ll need to implement more sophisticated processes and tools.
Key Challenge: Upgrading your systems and processes without losing the agility that made you successful.
Great Resource: “Mastering The Art of Scaling Your Business”, by Q Hamirani, Forbes, October 6, 2024 (technology, infrastructure, focus on customers, leadership)
Great Book: Scaling Up by Verne Harnish
6. Maintaining Consistency
As you delegate and grow, maintaining consistency in your product or service quality becomes crucial. Customers expect the same level of quality they received when you were handling everything.
Key Challenge: Ensuring consistent quality across all aspects of your business as you scale.
Great Resource: “10 Ways To Be Consistent In Business” by Tristan Wright, The Business Sherpa, October 30, 2023 (brand consistency, operational consistency, customer experience, quality assurance, etc.)
Great Book: 10x Is Easier Than 2x by Dan Sullivan with Dr. Benjamin Hardy
7. Evolving Your Marketing Strategy
Word-of-mouth might have been enough to get you started, but growth requires a more comprehensive marketing approach.
Key Challenge: Developing a marketing strategy that can reach new audiences and support your growth goals.
Great Resource on Networking: “3 Networking Myths that are Holding Your Career Back”, by Nirit Cohen, Forbes, October 10, 2024 (Don’t focus on the job only, look outside your work circle, don’t just rely on formal networking events)
Great Book: Building A Story Brand by Donald Miller
The Widest Net: Unlock Untapped Markets and Discover New Customers Right in Front of You by Pamela Slim
Crossing the Chasm by Geoffrey A. Moore
8. Preserving Company Culture
The culture you’ve built is part of what makes your business unique. As you grow and add new team members, maintaining this culture can be challenging.
Key Challenge: Preserving your company culture while welcoming new perspectives and ideas.
Great Resource: “No one cares about your company’s mission statement. Leaders, focus on this instead”, by Bill Shapiro, Fast Company, August 17, 2024 (focus on your origin story)
Great Book: Culture by Design by David Friedman
9. Time Management and Work-Life Balance
Growth often means more demands on your time. Finding the right cadence between working on the business and in the business (not to mention your personal life) becomes increasingly important.
Key Challenge: Managing your time effectively and maintaining a healthy work-life balance as your responsibilities grow. Offering the same to your employees.
Great Resource: “Five reasons to shift from work-life balance to work-life integration”, by Emily Howard, Fast Company, March 21, 2024 (Helps people stay productive, rewards outcomes not appearances, fosters innovation, improves retention)
Great Book: The 4-Hour Workweek by Tim Ferris
The Cadence Effect: Transform Your Life with Intentionally Productive Habits by Mich Bondesio
10. Planning for the Future
When you’re busy managing day-to-day operations, it’s easy to lose sight of the big picture. But successful growth requires long-term planning.
Key Challenge: Developing a clear vision and strategy for your business’s future while managing current growth.
Great Resources: “Why Companies Need To Look At The Future Through Different Lenses”, by Roger Trapp, Forbes, August 30, 2024 (like the analytical lens, the speculative lens and the systems lens)
“The Five Stages of Small-Business Growth” – classic article by Neil C. Churchill and Virginia L. Lewis from Harvard Business Review, May 1983 (stands the test of time!)
Great Books: Imaginable by Futurist Jane McGonigal
The Future is Faster Than You Think by Peter H. Diamandis and Steven Kotler
Remember, these challenges are signs of success. They mean your business is growing and evolving. By anticipating these hurdles, you can prepare yourself to overcome them.
As you navigate this transition, consider seeking advice and sharing your experiences with your fellow peers. We can all learn from each other and help one another avoid some of the mistakes we’ve made. Your insights – and those of your peers – can be invaluable as you transform your small business from owner-operated to growth-generating.
After all, the view from the next level is worth the climb. Just remember to enjoy the journey along the way!
Note: I have shared hyperlinks for all of the articles but some may require a subscription. For the books, if there is a hyperlink that means that the book is on my website bookshelf.
