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Scale up for growth (Your Business. Part 4/5)

John Nelligan


In part 3 of this series, we identified that there is no need for more than minimal controls to be in place as the staff numbers grow from the founder to around 10 staff. 95% of businesses in the UK are less than 10 people, the reason being one person can control up to this number by directing the staff themselves using their expertise and skills. They become the hub of the business and as learnings take place the business will become very profitable and will provide the owner with a great lifestyle. However, whenever the owner is away the business slows down and its dependency on the owner is emphasised.

To grow the business any bigger is going to mean that this dependency is removed. The dependency can be reduced by introducing functional leaders for the main business functions, typically, marketing, sales, delivery and finances. The level of expertise of these people does not have to be particularly high, but the team dynamics must work. The founder must step back and act as a coach for them. Many founders find this difficult and micro manage, thus removing the advantage the functional managers should give.

If the owner succeeds in stepping back and does not hanker for the days when they controlled everything, then the business is set for take-off to scale-up. A focus must be maintained on profitability to finance the growth, chasing turnover to grow is purely vanity and will lead to failure. The growth can occur either organically, by merger or acquisition. With the new-found time the owner has, they should now be in a good position to think strategically to control the growth and watch the finances at the same time.

If you would like some guidance on; recruiting functional managers, how to step back or scaling up your business then please request a no-obligation “health check” where we will discuss how Business Doctors can assist you to escape from the owners’ trap.