How to Grow Your Business by Clearing the Way to Growth

Is your business growing as fast and effectively as it could, or is it stuck at the same level it has been at for years? Research (Larry Greiner, 1972) has discovered 5 specific stages of business growth. Most business never grow beyond the second level. At this level, the business is characterised by a small group of owners (if not a sole owner), supported by a small team of people at an operational level. This describes the 90 plus percent of businesses, which have 10 or fewer staff.

Why should it be this way? The Greiner growth model describes 5 levels of growth that are characterised by the type of organisational structure and leadership style at each stage. The model describes a very obvious and practical problem that is evident in all businesses that grow over time. Growth is never simply a smooth transition from small to large. It occurs in a series of jumps from one level to the next. Growth at each level is limited by the structure and leadership style. A business can grow at each level to a certain extent, but after a while, the activity created by growth makes the structure at that level unwieldy and inefficient, limiting the growth, until the next evolution of the business occurs to solve the inefficiencies at the previous level.

The issue is not that these growth crises occur, but that there is a clear solution to these crises which few businesses take the time to discover. I am sure there are some business owners who want to keep their business small for lifestyle reasons, but I am also sure that if most business owners could find a way to grow their business beyond the current level, they would.

Most businesses that are stuck at the level where the owner(s) work in the business full time (or more) and there are a handful of employees, don't do what it takes to overcome the growth crises that are created at the limit of growth at that level. These crises are evident in the issues of control, where the business is dependent on the skills and input of the owners for most of the results and the owners can spend little time away from the business because performance will suffer in their absence. When work increases, the informality of communication and organisation become a liability resulting in errors, delays, poor quality and unsatisfactory service. Costs blow out and profits shrink rather than grow with increased sales volumes. Many owners conclude that it was easier and more profitable running a smaller business and revert to a scaled down operation. Unfortunately, this means the business and the owners never achieve their full potential and end up living a life far below the level that could have been accomplished.

Rather than scale down, the business could continue growing by scaling up. The solution to the growth crisis at this level is very clear and the path to growth is well established by the successful ones who have taken the leap to the next level. The answer is to re-organise the business with the owners delegating more responsibility to the operator level, appointing managers to take responsibility for certain functions, combined with developing systems to assist in maintaining control.

Many businesses increase the problems at this stage when they only increase delegation without increasing control. This is the key to smooth transition through this level. Control tools provide the information to management to ensure the business performs efficiently and profitably, with adequate cash flow. This development is often beyond the skills and experience of business owners who have come from a technical background and have never had training in finance and management areas. It is wise for owners at this stage to seek professional assistance in creating and establishing effective operating systems and control measures. As the business grows, the need for greater professionalism grows as well. Owners are wise to commit to a self education program so that they develop the knowledge and skills to run a business at higher levels.

At the higher levels of growth, the crises are more evident in the leadership areas. With growth, the need for increased management and organisation grows proportionately. Sometimes businesses need to be restructured along functional lines, or sometimes organisation is more determined by geographic elements. Whatever the case, the need for strong leadership and communication with management levels about performance issues, motivation of personnel and strategic elements of the business are of greater concern than the technical issues were at lower levels. Business owners need to develop their own leadership skills as well as develop or employ highly skilled managers.

If you are frustrated that your business has the potential to grow, but can't find the way through the current hurdles you are facing, which create increased stress, over work and performance issues, perhaps it is time you looked at changing the structure of your business and becoming more professional about how you manage it. Unless you make the changes, your business will be forever held back. You will not be capable of further growth until you re-create your business to perform efficiently at the next level. You may be held back because your current situation makes you too busy working in the business that you don't have time to work on it, to develop new systems and controls. It is time to bite the bullet. Unless you free yourself to work on reinventing your business to clear the way for growth, you will continue to bounce up against that invisible ceiling you keep hitting, without ever being able to break through.

(c) 2005 Greg Roworth, Progressive Business Solutions Limited

Greg Roworth is the Managing Director of Progressive Business Solutions Limited, a business development consultancy firm with branches in Wellington and Auckland, New Zealand. Greg has created a unique business development program that assists business owners transform their business from a state of total dependency on them to a state where the business works so well they don't have to.

Greg is also the author of "The 7 Keys to Unlock Your Business Profit Potential," which descibes the fundamental keys a business needs to achieve this transformation. Find out more, get 2 free chapters, or buy the book online at http://www.small-business-success.ws

---

Your Business: Will It Have A Happy Ending?

"Begin with the end in mind," says Stephen Covey in... Read More

Are You Aware of Planning in Business?

Human beings are rational agents. Rationality endorses one to take... Read More

How to Start A Business Plan

A business plan precisely defines your business, identifies your goals,... Read More

Alice In Wonderland - A Parable for A Business Plan

Remember reading "Alice in Wonderland?"She asks the Cheshire Cat, "which... Read More

Executive Summary for Business Plans of Franchisees

Writing a business plan for a franchised outlet of a... Read More

How to Achieve E-commerce Success ?You Gotta Plan!

Before becoming a netpreneaur, I was an entrepreneur. First, I... Read More

What is a Shared Vision?

So what makes a vision successful? Everyday companies try to... Read More

Do You Have A Customer Identity Crisis?

The trick is to determine what uniquely identifies your best... Read More

Call in the SWOT Team: Produce More Opportunities to Expand Your Business

Have you ever done a SWOT analysis? No, it's not... Read More

Innovators Role at Hard Times

One Research Scientist at the Hewlett-Packard (HP) Imaging Systems laboratory... Read More

Business Ideas: 3 Smart Ways To Generate Profitable Business Ideas Anytime

Creativity is one of the greatest tools for success in... Read More

Balanced Scorecard Strategy Map

With the help of balanced scorecard strategy map, it is... Read More

Secrets Of Effective Brainstorming

Have you been in a "brainstorming" session where each person... Read More

SWOT Analysis Is No Magic 8 Ball

Q: A key investor in my business has suggested that... Read More

Shortening Product Life Cycle!

The current state of the available technology at the disposal... Read More

Don?t Just Talk About the Weather, Use It to Advantage

A well known, national chain of restaurants discovered that certain... Read More

Urban Flight in Ohio

Many of Ohio's downtown areas are in need of upgrading... Read More

Titanic Precautions

Many movies have been made about the tragic story of... Read More

Resilience

I. INTRODUCTIONThe term resilience, which is of frequent use in... Read More

Innovate Today for Great Leaps Forward Tomorrow

How often does your company make a quantum leap forward?... Read More

To Go or No Go, That Is The Question

Last week we talked about a few of the ways... Read More

Cost-cutting Essential to Maintaining Profits

Why cut costs now? Efforts are multiplying to cut costs... Read More

Break-Even Analysis

A significant advantage of some business ideas is that the... Read More

Describing Intellectual Property in Your Business Plan

Most companies that are worthy of raising venture capital have... Read More

Site Selection and Demographic Tips for Establishing Outlets

Many cities have home pages on the Internet. Many of... Read More

Microsoft Great Plains Implementation: Healthcare/Hospital example ? overview for consultant

Microsoft Great Plains fits multiple services market niche and healthcare... Read More

Clearing the Path: 4 Ways Fear Wreaks Havoc on Your Dream and What to Do About It

Please take a moment before you read any further and... Read More

Microsoft Great Plains Implementation: Placement/Recruiting Agency example ? overview for consultant

Microsoft Great Plains does wonderful ERP job for horizontal markets... Read More

25 Ways To Find Companies To Buy

When you start your program to purchase your "ideal" company,... Read More

Six Key Areas For Evaluating A Strategic Alliance

Strategic alliances are increasing at a rapid rate. It is... Read More

Turning On The Lights

Fun From The StartFor those with the will to start... Read More

How to Snuff Out the Competition Without Leaving a Mark

Does the competition drive you crazy?Are they relentless about taking... Read More

The Impact of Price Popularity on Profits

The goal of almost every business owner is to generate... Read More