Business Growing Pains – An Everyday Horror Story

About 70% of businesses in the UK are described as one-man bands/ sole traders/ individual consultants (depending on their trade or profession ;)).

There’s a particularly scary time for most people who “run a business” and that’s the transition period when they are moving from being the business to doing just that: Running it.

It starts harmlessly enough but often just seems to gain downhill momentum:

Those that take on staff usually do so because they’ve reached the stage where, despite at times working 14-hour days, 6 days a week, they’re at the limit of the amount of work they can handle on their own.

So they bite the first bullet and hire someone to provide more of the core business offering – a hairdresser, driver, plumber, electrician, web designer, engineer, therapist, trainer, etc. That’s normally quite straightforward, after all, that’s the job the business owner knows inside out. S/he knows what to look for, what questions to ask, what answers to expect, qualifications to check and what (if any) practical tests to give.

The owner is now a Boss, albeit a “hands on” one, still very much part of the core business. And, as the company consistently does good work, its reputation gradually grows and more work comes in. As it does so, there’s more money, so more technicians can be taken on plus a part time office manager/ bookkeeper who frees up more of the Boss’s time to do what s/he’s good at.

Then, after a while, business goes a bit quiet: A major customer is taken over and must now use another supplier, a competitor has set up in the area and is undercutting, whatever the reason the company is no longer working to capacity.

It’s okay: There’s plenty of slack so the Boss hires a salesman or a marketing outfit (or both). S/he realises s/he can’t expect instant results and is prepared to give it three to six months to start showing return on the considerable investment.

Only it doesn’t.

And, what’s more, some of the existing customers are querying invoices and paying slowly. This has never happened before!

Why are things suddenly going pear shaped?

Michael E Gerber’s book, The E-Myth Revisited – Why Most Small Businesses Don’t Work And What To Do! – goes into this syndrome in depth.

But in brief, in our scenario:

Our Boss hasn’t ensured excellence within the individuals hired to take responsibility for three key support areas:

  • Management
  • Finance
  • Sales

S/he hasn’t retained control – not kept an eye on customer service or satisfaction, the invoicing, or asked for a breakdown of the salesman’s activities – for months. S/he just let the two individuals get on with their jobs and assumed everything that should be done was being done in the best interests of the company. And now:

  • The salesman has cost £10,000 with nothing to show for it to date
  • The office manager/ bookkeeper, whilst on the face of it costing a lot less, has done untold damage to customer happiness and cash flow

Our Boss hasn’t actually been running the business so much as playing technician and doing the fun bits. S/he now has a big headache:

How to get rid of these two without more money going down the drain and get the business back on track?

And the really, really scary bit is: This Horror Story is more common than you would think.

But all is not doom and gloom! We’re going to move on next to look at ways that can help avoid these kinds of growing pains.

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