Sometimes a difficult decision in Family Business is deciding if you need to get bigger


 

TAKING YOUR FAMILY OWNED BUSINESS TO A HIGHER LEVEL OF ACTIVITY AND PERFORMANCE.

Sometimes business owners and entrepreneurs either don’t understand management issues or just cannot handle the change.

Along with sales growth, it’s all about people, cash flow and adequate systems and processes.

What are the key business issues you must manage and how do you change your mind set when you take the leap from very small to a level of performance that will lead you to being a successful entrepreneur

 

One of the most challenging aspect facing entrepreneurs is the transition of moving from a small operation of maybe just a couple of friends with whom you took an idea, worked like crazy, mortgaged everything you had, worked in someone’s front room and then relocated to a shared office or similar. Now it’s the next step again, you have been experiencing success, it’s time to start employing more staff, investing in new IT systems and digital strategies, finding new offices and starting a professional sales and marketing program

For many, the dilemma is that they don’t want to lose the close-knit family type culture, the shared enthusiasm and the high level of excitement that has been driving you to where you are today. One of the biggest challenges is letting go of control of the daily management issues.

This one of the reasons you often see the original founder leave the business when there is a buy out or when outside investors are brought in. Recently, in Australia, one of our most publicised up and coming entrepreneurs was asked to step aside by the new board after he brought in venture capitalists. The common belief was that the founder was not capable of handling the next stage of growth and development and the requirement for sophisticated monthly management reports and the ability to handle to people issues.

Once you start building an infrastructure of people and systems, flying at one hundred K’s an hour and making decisions on the run without systems and human management processes it could bring about disaster. One only has to look back at the Apple management fiasco when the company floated and brought in outside CEO’s and the wheel was turned when Steve Jobs came back and the business had a new star products in the IPod. I Phone and I Pad.  Richard Branson saw the writing on the wall early and understood that he couldn’t build his dream without learning to let his managers manage while he got on with the dream weaving.

There is a vast difference in the management systems required between a small emerging enterprise than one which is about to embark on an expansion journey. And, in my experience it’s all about people, marketing and systems. Having been through the transition of taking my own business from small to a bigger enterprise I know how it feels. In the 1980’s having sold my business to a public company I became the COO of a multi-national subsidiary and we were over loaded with data and reporting. Decisions took weeks to be approved.

I later looked back at my days on my own and understood how much better off I would have been if I implemented some of the systems and processes used in a large corporation. The challenge is to know how to take some of those systems and processes and use them without killing the entrepreneurial spirit in your own business.

You will find that as you grow, the decisions you make will have far bigger consequences. These decisions will need to backed by more meaningful and accurate data being available to you. This will necessitate investment in an IT infrastructure and software you never thought you needed before.

Some of the key management requirements to success when making the transition to a larger business format are:

If you, as the business leader, can continue to capture the hearts and minds or your new employees, sell them the vision for the future, let them take risks, recognise and acknowledge their achievements and implement measurement and accountability, then your mostly there.

In this decade there is a need to focus on retaining employees rather than on the recruitment of new staff. The pool of skilled people with the right attitude is low at the moment and it’s a buyer’s market.

Seek outside advice, get an experienced mentor, set up an advisory board, listen to them and monitor you progress regularly. Let your managers manage and don’t be a control freak. You now have to be a leader and visionary, not a manger.

If you recognise that you need managers and new systems them employ a CEO or general manger and give them the authority to get on with all those management issues that you are most likely not very good at.

Bill Winter

Ph: 0411536424

September 2017



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