How To Expand A Small Business
Here’s an EntreLeadership Podcast question from Neal McGuire:
How do you expand a small business, where the owners do most of the management and work, to a larger one, where not all the decisions are made by the owner and employees have less direct owner supervision?
Expanding a business requires two things:
- Net Profit – In order to grow, you have to be able to afford it. Increasing your bottom line is essential to every aspect of business growth. Without it, you are unable to hire new team members or pay for the marketing needed to grow the business. Therefore, it may take some long days and weekends of doubling your efforts until you can afford to hire.
- Talent – Once you have the additional cash, then you can start hiring very talented people to do two things: increase revenues or take the tasks off of your list, so you can increase revenues. Cost-justifying a team member is always vital, but it is critical in a small business. You just don’t have room to add expenses that cost more than you can make.
The next step, as your team grows, is to build layers of leadership. You need strong leaders, who will take more of the responsibilities and decision-making processes. But, as I always say in EntreLeadership, it is the leader’s job to make their team successful. You need to transition from focusing on daily tasks to doing everything possible to make sure your team has whatever it needs to be successful.
Too many leaders think that hiring talented people or putting people in a role of leadership means they can back off and take it easy. Nothing could be further from the truth. As a leader, you are still the heartbeat of your company. Expecting your team to win when you haven’t properly set them up is a sure-fire way to cause your business to fail. Get your team in place and serve them. Then, you’ll spend your time working on the business instead of in it.
Question: What are two requirements you think are vital to expanding a company when adding team members?