Next Phase growth
Next Phase growth
Small companies often hit barriers in their early years, limiting the speed of growth or even the ability to grow at all. This article examines some of the issue and suggests solutions to help new and rapidly growing organisations maintain momentum.
The Next Stage?
Even in these straightened times, there are a large number of new companies (and other organisations) that have started in the last few years and have grown rapidly.
It is commonly observed that start-up companies get to a size of roughly £250k-500k and/or 3-10 staff, and then often struggle to make the leap to the next stage, say, revenues of £1million per annum, and a wider customer base.
Business books, academics and "experts" often cover this topic at length, citing the changes in management attitude and working practice that must evolve within the organisation to make the "next step". Indeed the business books talk about several "steps" that need to be taken to grow from the size of an SME (small medium enterprise) to global domination.
Management Attitude
Achieving a change in attitude is particularly challenging for owner managers, especially where emotions are tied up with the creation of the business or products. It is uncomfortable to relinquish control to others, even if they are just as competent and share similar attitudes. Often they are not or don't.
Working Practices
Similarly, the dynamic, full-on, bureaucracy-free working practices that probably fuelled the business to win its first customers and achieve growth will be starting to feel slightly out of control. Errors and customer service issues usually start to appear and some staff, relying on manual, often tacit, procedures and working processes that have served well to this point, are stretched to handle any bigger workload.
Grow through it...
Most businesses that grow past this phase either do it by "good fortune" or by starting to introduce standardised procedures.
"Good fortune" often comes through a success in winning a big customer/order thereby driving up revenue and headcount, with far less overhead than would be the case by winning many smaller customers/orders. The risk, though, is increased commercial dependency on the big customer.
The standardisation of procedures, although not appearing all that glamorous at first sight, does provide a platform for "emotional support" of owner managers by embedding their own or aspired business disciplines into the activities undertaken, no matter who does them. Procedures may also break the link between staff numbers and revenues and so enhance profit. And there may also be sales imperatives - e.g. a requirement for suppliers to be ISO9001 certified - can be a strong driver to standardise.
How to standardise procedures
Once it has become clear what needs to be standardised, there are only two choices on how to implement standard procedures in a business:
- Create manuals, forms, and invest in filing space...
- Implement computer-based systems.
Most businesses do both (e.g. in small businesses think purchase order form, and Excel sales forecast). The trick is to implement the business procedures using "well-fitting" computer-based systems, ensuring that the implementation can:
- be changed regularly/continuously, cheaply and flexibly to meet emerging business needs
- integrate the organisation's contact with customers, partners, and suppliers (because in most businesses the most time consuming/expensive parts of a process are the hand-off/referral points between different individuals/organisations)
- scale up, so that procedures and processes do not need to be completely re-implemented when the business wants to grow further.
What we can do
Having delivered many successful transformational projects in small, medium and large organisations, we can help aspiring businesses to:
- identify priorities, and understand potential value of new/improved working processes
- design these procedures and working processes
- optionally, implement them in software, and/or procure appropriate systems
- manage an ongoing process of change and improvement.
We have found an economic way to implement systems that are inexpensive and yet can precisely fit the individual organisation's optimal working practices.
If you think this could help you organisation then please contact us on 01923 750400.
