To Grow or Not to Grow
Seasoned owners learn that it’s sometimes just as perilous to stand still as it is to move ahead.
Yours is not the only business that has come face to face with difficult decisions about future growth. For any healthy business, there comes a point when the owners must decide to take the risk of a new growth strategy or to take the risk of staying with their current game plan. I some cases the risk of doing nothing or even of sticking to “business as usual” in the face of a changing market can be even greater than the risks associated with change.
Because the longer you stay in the business game, the more sophisticated the players become and the higher the stakes. That is what makes it fun (or at least never boring) and keeps entrepreneurs coming back for more, despite the ups and downs. Newcomers can enter market niches that are being ignored by players already in the field, but eventually these players will wake up and muscle into your game.
- Ask yourself what goals you have for yourself and your company. Do you see your business mainly as a means to make a nice living and enjoy independence? Or do you have dreams of becoming a major competitor in your industry, enjoying phenomenal growth and perhaps going public and being acquired? If the latter is true, then you need to learn more about the capital markets. No business of any scale can be run out of the owner’s pocketbook. It needs a good banking relationship and possibly investors.
- Ask yourself if you are limiting the growth of your company because of unresolved personal issues. I have found that many people reach the first growth hurdle with great ambivalence.
The idea or dream they had took hold - now what? Some of the unresolved issues you may be wrestling with:
- Commitment. You started your business with big dreams, but now do you worry about what it will do to your life if it grows any more?
- Fear of failure: Do you see failing as a major loss or just a learning experience?
- Fear of success: Do you worry about the impact of your being a tycoon on your family and friends, and feel uncomfortable with the new role you visualize for yourself?
- Fear of losing control: Do hiring professional managers and learning how to manage them scare you?
- Fear of responsibility: Does the idea of being responsible for employees and their families, even when times are bad, give you a knot in your stomach?
- Loss of face: Do you worry about putting your reputation in the business world at risk for the sake of growth?
- Losing everything: Does the thought of going “bust” keep you awake at night?
- Ask yourself what would happen if you took this move and what would happen if you didn’t take it. Too often in business seemingly safe moves can be perilous because of the dynamism of the marketplace. Business demands aggressive players. Particularly if you are in an industry that changes rapidly and has heavy competition. Sometimes not risking is the biggest risk of all.
- Refine your decision making techniques. Do you act on intuition or on the basis of hard data? If you act intuitively, your subconscious motives may be interfering. Learn some basic techniques of decision making; trade-off analysis, cost benefit analysis, decision trees, and take decisions out of your gut and into your head.
- Learn about how other businesses have grown through leveraging. Talk to other owners, bankers and financial consultants and learn how financial deals are made. Financial people use basic tools such as financial ratio analysis to gauge a project’s potential and its risks. Make sure you’re familiar with these terms and ideas.