Owning and operating a small business can be fun, rewarding, challenging and yet frustrating all at the same time.  Most small businesses start out with a handful of people…typically, the owner, a salesperson, bookkeeper and a production worker.  As the company grows, so do the number of employees, customers, problems and challenges. Before long, the owner is living and breathing his business with very little time left over for family, friends, vacations or other leisure or “self-care” activities. Stress increases.

Although the company has grown beyond the original handful of people, the owner may still be involved in the day-to-day details of running the business.  In addition, a new awareness begins to surface in areas such as…

  • Team members don’t seem to perform as well as they should or could, leading to turnover or non-productive or unacceptable performance.
  • The owner has to solve most of the problems and make all of the decisions.
  • Communication breaks down, and sometimes the right-hand doesn’t know what the left-hand is doing, so to speak.
  • Lots of ideas exist but the organization can’t seem to get them implemented, and it’s a struggle to stay focused.
  • The same problems keep surfacing.
  • Deadlines are missed, quality and service suffers.
  • Customer complaints increase.

In other words, the fun of running ones own business disappears. It becomes a real effort to muster the energy to go into the office only to fight fires and deal with crisis after crisis.  Thoughts of selling the business begin to be very, very tempting.

What I have just described are some of the phases a small business goes through as it experiences growth. The good news is that this transition is largely typical for most successful small businesses. The bad news is that the way the organization operated when it was started no longer works.  It must undergo change to a more “professional” way of managing the business. Specific elements must be in place in order to build a strong foundation to support continued success and ensure the company lives in perpetuity.

The three stages a company goes through as it matures are:

  • Entrepreneurial Stage
  • Reactionary Stage
  • Proactive Leadership Stage

The stage a company is in will determine how communication, conflict, problems and other issues are handled. In the Proactive Leadership Stage, the quality of life and level of results are dramatically improved for the owner, Team members, customers and all other stakeholders. To get to this stage will require that the owner grows in his leadership skills, thinks differently about his business and changes how he interfaces with his Team. It all starts at the top.