Entrepreneurs invest an enormous amount of time, effort, and resources in building their startups into stable, profitable enterprises. Considering these major sacrifices, it’s no surprise that many business owners become very cautious about making major changes once they do achieve that stability and profitability. Unfortunately, those instincts can get in the way of their business’ continued growth and long term success.
Making a business grow, and ensuring that it remains competitive over time, requires constant innovation and progress. To do that, business owners need to learn to pursue innovation, while letting go of clients, procedures, and roles that no longer serve the interests of their business.
Driving innovation in your industry
The ideas and products that built your startup’s initial success will only carry it so far. The more competitive an industry is, the more rapidly a business’ current way of doing things will become obsolete. In order to grow, your business needs to not only adapt to this, but rather to lead that change through innovation.
Investing in change
Simply keeping up with a changing industry requires businesses to track developing trends, purchase new equipment and software, and to train their employees regularly. Leading that change, though, also means investing in the development of new ideas, and taking the risks associated with experimenting with those new ideas.
To manage the risk of a setback directly, businesses need cash flow management tools like invoice financing and supply chain finance. These allow them to distribute the financial impacts of a setback over a longer time period, giving them the freedom to act. Moreover, businesses need to ensure that they can invest in themselves. That means streamlining their operations as much as possible as they grow, and getting rid of inefficiencies as they develop.
Out with the old
As the needs of a business change, the way it operates needs to adapt if it means to maximise its profit, growth, and overall effectiveness. Most often, this means letting go of familiar and safe aspects of your operation to make room for bold, strategic, and growth-focused decisions.
Let old clients go
Early on, startups often rely on just a few important clients to keep them afloat. Over time, they develop a close relationship, and a sense of loyalty to each other. Those first clients often represent a strange anachronism within these businesses, tying up the most experienced employees, enjoying special privileges, and paying disproportionately low prices. Unfortunately, this can get in the way of your business’ success. As businesses grow they need to switch gears, raising prices, optimising services, and switching to larger, more profitable clients that offer more growth potential.
Don’t promote based on familiarity
The first manager a business ever hires might be an excellent team leader, working directly with the business owner as their second-in-command. This doesn’t mean, however, that this person would also be effective in a high-level executive position when the business grows. As your startup becomes a more mature business and larger hierarchies are implemented, current employees need to be placed in positions where they’ll be most effective, while new talent needs to be brought in to meet the new demands of your business. For business owners, that often means surrounding yourself with new faces, while keeping more familiar employees in the roles where they’re most effective.
Get out of the way of progress
The job of a business’ leaders changes as it matures and becomes more complex. While an entrepreneur is often directly involved in every aspect of their business, chief executives of established firms need to have a much-limited scope if they hope to be effective administrators. Great entrepreneurs, who tend to view their business very possessively, often don’t make great CEOs. Because of this, business owners need to be mindful of the difference between founding a business, and running a larger enterprise. If they want to continue to run their business in the long term, they need to acquire the specific skills that being an effective CEO requires. That often means getting formal training, delegating some core responsibilities to more experienced professionals, and being willing to listen and implement the advice of investors and seasoned employees.
Growing a business isn’t just a matter of acquiring more clients and producing more. Instead, it’s a transformative process that requires every aspect of your business to evolve. By embracing this, and deliberately leading that change, you can turn your startup into an industry-leading enterprise.