Many challenges come with growing a business. In his new book, “Growing an Entrepreneurial Business: Concepts & Cases,” University of Virginia professor Ed Hess has laid out the top challenges and solutions from his own research of 54 high-growth companies.
“The good news is that most businesses experience the same or very similar challenges when it comes to growth. There is no need for any entrepreneur to reinvent the ‘growth wheel.’ You just have to be willing to learn from those who grew before you,” he says.
Read on to learn more about the first five growth challenges facing today’s entrepreneurs.
- Getting overwhelmed by growth. “Growth is like Mother Nature,” Hess explains. “She can be good or she can wreak havoc with hurricanes, earthquakes, and floods. To properly manage company growth, successful, experienced entrepreneurs recommend the ‘gas pedal’ approach — when you start to feel overwhelmed, let up on the gas to allow processes, controls, and people to catch up.”
- Knowing when to say “no.” “The problem is that too many entrepreneurs never learn to say ‘NO!’ In an effort to get their business off the ground and keep it up and running, they say ‘yes’ to everything,” Hess says. “They end up trying to do too much for too many, which dilutes their focus and often the quality of their product or service. Determining and having the discipline to maintain a narrow strategic focus is critical to success, and that will require that you turn down certain opportunities. Successful entrepreneurs often call it ‘sticking to your knitting.’”
- Learning to effectively delegate. Hess says, “Most entrepreneurs don’t like to give up control of any aspect of their business. Facing the fact that they can’t do it all on their own and that they must learn to rely on others to complete certain tasks (and not necessarily exactly how they themselves would do them) can be a very hard reality to swallow.”
- Transitioning from owner to leader. “Coaching requires that time be spent getting to know people, listening, caring, understanding their emotional needs, and helping them grow,” Hess says. “Coaching takes patience and a degree of personal emotional intimacy that many entrepreneurs are not able to achieve. It requires a continuation of the mind shift from ‘me, the entrepreneur’ and ‘my way’ to ‘it is really all about them.’”
- Hiring smart. “In my research, bad hiring practices often continued when entrepreneurs tried to hire managers who needed to have functional or technical experience,” Hess says. “In many cases, the companies had to make multiple costly hires for the same position before finding someone with the right competencies who also fit the company culture. Many of these entrepreneurs frequently stated that they should have ‘hired more slowly and fired more quickly.’”
Hess continues, “They made much better hiring decisions when they learned to hire against a competencies and cultural scorecard; conduct multiple interviews; have multiple people interview prospects; hire on a trial basis; establish mentors for new employees; develop a good on-boarding process; and encourage good employees to make hiring referrals.”
Look next week for the remaining four challenges.
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Edward D. Hess is a professor of business administration and Batten Executive-in-Residence at the Darden School of Business, University of Virginia. He is the author of nine books, more than 60 cases and more than 60 articles. His work has appeared in more than 200 media outlets around the world, including CNBC, Fox Business News, Dow Jones Radio, WSJ Radio, MSNBC Radio, NPR, Forbes, Bloomberg and BusinessWeek. His book “Smart Growth: Building an Enduring Business by Managing the Risks of Growth” was named a 2010 Top 25 Business Book for Business Owners by Inc. magazine.