BALANCE AT WORK BLOG

Are You Killing the Business You Love?

Killing the business you love
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Killing the business you love involves mistakes, misdemeanours and stunning failure brought about by business owners who didn’t know their limitations – so how do you avoid similar pitfalls?

Often it’s the step from entrepreneur to a public listing and becoming accountable to a board and shareholders that brings people undone.

Often SMEs fail to thrive or just fail completely because their founder fails to recognise that what got them to where they are is not what will get them to where they want to be.

As owners and CEOs they can be slowly, without realising it, kill a thing they love: their business

Each stage of the business life cycle requires a different type of leadership.

The five stages of business

1. Creation

Innovators who have a vision or have spotted an opportunity are the reason a business exists and the best leaders for the earliest stages of business.

They have passion and perseverance, and because the team is usually small, their contagious enthusiasm will power the business.

2. Survival

Sales are the most important driver once the business is launched successfully, so the leader at this stage has to be committed to growing market share and revenue.

READ: 3 steps to predicting sales

Sometimes the initial enthusiasm that created the product or service is enough to do this – but a business can get into complications because the business owner is more committed to the product than growing the business.

3. Growth

At this point, it’s essential to build an effective management team and generate scale based on the success of the previous stage.

Leaders at this stage need the skills not just to grow the business but build the structure, systems and processes required to deliver on the promise of even greater growth.

It’s at this stage that many entrepreneurs lose interest, confirming the importance of having a good management team in place.

4. Expansion

A business that has successfully grown its market share is now ready to strategically expand into new products, services, markets or niches.

The leaders now have the dual role of looking outward to explore new opportunities, while simultaneously ensuring internal governance stays on track.

This stage requires a high level of tolerance for complexity along with strategic acumen.

5. Maturity

Business at this stage is all about protecting an asset.

A leader will do best to focus on consolidation and cost containment. While some refining of the operations and offer will continue, this is not the time for drastic innovation and ongoing change.

READ: Are you an innovation gambler?

While it’s important not to slip into stagnation, leaders at this stage are required to provide stability and confidence.

3 challenges a leader will face

It’s tempting to think we can lead our business through each of these growth stages.

Crises often mark the transition between growth stages, and they’re a great way of alerting us to the need to change or make changes.

An effective leader knows how to deal with the challenges that arise.

1. People

In any business, not just startups, it’s often when a technically competent manager assumes responsibility for running a team that we notice them struggling.

The challenge of motivating a team to love your business as much as you do can be hard. A leader can learn to manage and motivate people.

READ: 5 budget-friendly ways to reward your staff

It’s often only the recognition that they need to learn that stands in the way.

2. Money

The bigger the business, the higher the responsibility for the people in charge to know what’s happening with the finances.

As a business grows, it’s no longer sufficient for one individual to keep track of the bank balance.

Knowing what your numbers mean, accessing adequate funding, having competent staff and a great accountant make all the difference.

3. Systems

For a business to thrive, it needs reliable, scalable, flexible systems and processes, including financial systems.

READ: The what, when and how of an ERP system

It’s the leadership’s responsibility to ensure systems are understood and used. The goal is to build an organisation where others complete the bulk of decisions and tasks without your input.

That way, the business will be able to meet demand as it grows, but taking your hands off the wheel can be a challenge.

My experiences as a business coach and mentor have shown me that for most entrepreneurs this is the most difficult step.

Are you willing to make the changes you need to make to lead your business not just to survive but thrive?

This article was originally published on MYOB’s blog, The Pulse. For more business news and tips, visit www.myob.com/blog.

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