The management challenge for small business owners

The real management challenge for you as a small business owner is to be able to make subtle shifts in your management approach as you move your business through five stages of growth:

  1. Start up.  The central issue in this stage is winning customers for your products and services.  What you plan is likely to be be focused on products and services, what you organise will be marketing resources, who you lead is likely to be yourself and perhaps a very small team and what you control will be prices and cash.
  2. Survival.  Profitability is the focus in this stage.  Planning will be targeted on sustainability, organising on cash flow, leading on setting challenges for staff and control on the profit and loss.  A more balanced management approach is required to sustain sales whilst ensuring the business is financially viable.
  3. Success.  Delegating to others is the major emphasis in this stage so you will need to lead more and do less personally.  You may also need to reorganise and bring in managers.
  4. Takeoff. This is the stage where you move from being a small business to a much larger concern.  Planning will focus on getting finance for expansion, organising on making sure that the different parts of the business work together effectively, leading on motivating and control on growth.
  5. Maturity.This may be the stage where you consider exiting the business through a sale.  Putting in control systems to attract buyers and to reassure them about the long-term viability of the business is likely to be the drive in your management approach.

The key point here is that you need to develop your management style to suit your business’s stage of growth.  If you are planning, organising, leading and controlling at stage 4 takeoff in the same way that you did during stage 1 start up you are going to encounter problems and most likely with staff.

Symptoms of using the wrong management approach for the business’s growth stage include:

  • Finding that what worked in the past no longer works;
  • Not having enough hours in the day to get work done;
  • Staff being only partly engaged and motivated;
  • Problems arising out of too few systems and controls;
  • Running short of cash on a regular basis;
  • Internal confusion about roles and responsibilities;
  • Lower profit margins;
  • Lack of growth.

Business management is a hard task master because you are ultimately responsible for what happens and your management approach is always centre stage.  Make sure that your management approach is a solution to the problems of growth not the cause of them.  Do this by actively adapting your management approach over time.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s