Small business growth The life of an entrepreneur and the path of a small business owner is a perilous one. At the start, it’s all about getting enough revenue to survive. The owner doesn’t wear many hats but wears all the hats. After long hours, sacrifice, and good decisions, one day the business arrives! For me, it was at the 18-month point when I realized that I could make a living and be successful. Many small businesses have reached the stage of being sustainable. The business might be a one-person consulting business, a machine shop, or a small restaurant. Sure, there are still perils and risks, but the owner knows that critical start-up stage is past. Now what? For many, this stage is good enough. The business provides a lifestyle the owner wants, and maybe becomes self-sustaining and profitable enough to sell someday.
BUSINESS OPERATIONS By Mike Leigh Executive Summary: Beware - an owner’s tunnel vision can be harmful long term.
For others, however, the motivation is different. The owner wants to scale the organization and create an entity that goes beyond a small business. The reasons can vary, but the desire is growth. Which path is best? There is no wrong answer, but the owner must decide. The risk for the owner is that the entrepreneurial skills that enabled success in the past may hurt a business trying to achieve growth. In a Harvard Business Review article by John Hamm titled Why Entrepreneurs Don’t Scale, there are four tendencies small business leaders need to be aware of that can impede the growth of a small business. • Loyalty to comrades – the small dedicated group that got the business through start-up may not have the skills for large growth. These employees can become liabilities. • Task orientation – laser focus to the job at hand may have helped at the start, but too much attention to detail can cause the owner to lose the big picture.
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Singlemindedness – Entrepreneurs often focus on a single product or service, or a single function (engineering, marketing, etc.) But this tunnel vision will be harmful if the owner cannot expand to address all business functions.
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Working in isolation – To successfully grow, introverted entrepreneurs must present their company to the outside (clients, suppliers, investors, etc.) which can’t be done by staying in the office.
For the small business that wants to achieve significant growth, identifying and overcoming these tendencies is critical to success.
t SEPTEMBER 2020 / vbFRONT.com
