If you are looking for help with your business, you might want to check out our book let go to GROW: why some businesses thrive and others fail to reach their potential. In this award-winning book, we cover how to grow your business from micro to small and from small to midsize profitably.
Q. I read your book, Let Go to Grow. I’d like to grow my company into what you call a fully developed midsize business —one where the business effectively runs itself on a day-to-day basis so that I can focus on more strategic issues. Unfortunately, I’m having a hard time. Are there some businesses that just can’t get to this point?
A. First, thank you very much for reading our book. We hope you found it to be helpful.
The short answer to your question is, yes, there are some situations where it is very difficult or even impossible to grow a company into a fully evolved midsize structure. Such companies are not easily scalable. Those businesses tend to have one or more of three characteristics.
1. The owner has a unique skill set – If the owner’s skill set is so unique that it would be difficult to hire another person to do the primary work of the business, the enterprise is not scalable. For example, it would have been essentially impossible for Rembrandt to have scaled his business. No one else had his skills. As a painter, Rembrandt was stuck in what we call a micro business structure—one where the owner does the primary work of the enterprise. The same could be said of great composers like Beethoven, Brahms, or Bach. Having phenomenal skills in a particular area like these masters is an amazing gift, but it will make your enterprise almost impossible to scale.
Q. I am starting a new business. Initially, I’ll be working alone—a solopreneur. I am thinking about renting an office rather than working out of my home. What do you think?
A. We have both worked in offices and out of our home, so we have some prospective on this issue. Obviously, there is no one right answer to this question. The answer that’s right for you depends on your specific situation and what is most important to you. We’ll outline some pros and cons, suggest a few questions to ask yourself, and give you an alternative that may not have occurred to you.
Pros – In our home, we have a beautiful office over the garage that is separate from the rest of the house. It has a fireplace, wet bar, bathroom, large partner desk and more built-in file drawers and bookshelves than we have been able to fill. Working from home meant that we eliminated the morning commute. At home, the dress code is extremely casual. Our two cats can come by for a pat on the head in the middle of the day—or just about any other time they wish. These are all good things. In addition, working out of our home saves us the costs commonly associated with an office including rent, janitorial services, and utilities. The big pros to working out of your home are convenience and cost.
Q. I've reached the difficult decision that I need to terminate one of my employees. What is the best way to handle this?
A. Terminating an employee is a big decision and never easy for either party. When making a decision to dismiss an employee, we suggest the following three steps:
Make sure that you gave the employee the opportunity to succeed. Ask yourself . . .
1. Did I carefully and specifically explain my expectations to the employee and check that the expectations were understood?
2. Did I remove any roadblocks, internal to the company, which might have kept the employee from succeeding?
3. Did I give the employee sufficient training and enough time to acquire and practice necessary skills?
4. Did I motivate the employee to succeed including giving positive and negative feedback as appropriate?
If you can answer yes to these questions and the employee is still underperforming, it may be time to make a change.
Make sure that you protect your organization. Virginia, like many states is “at will.” This means that you can terminate an employee for any reason or no reason at all. However, there are exceptions to this doctrine. Most of these have to do with terminations for discriminatory reasons. If you are not sure, speak to a qualified attorney or HR specialist.
Q. I'm sorry to say it, but the owner of the company where I work is the quint essential micro manager. He has hired three managers (I'm one of them), but he won't give us any decision making authority. I'm not sure why he won't delegate, but it's killing our company. Because everything has to go through the boss, we can't respond quickly enough. What would you recommend?
A. In the process of doing research for our book, Let Go to Grow; why some businesses thrive and others fail to reach their potential , we interviewed the owners of more than 100 small and midsize businesses. One of the consistent patterns we found was that entrepreneurs had difficulty effectively delegating decision-making authority. The primary reason is that delegating decision-making authority means giving up a measure of control and that’s hard for many entrepreneurs.
Yet, if their businesses are to continue to grow, these owners will have to overcome their reticence to let go. Failure to do so will mean that the principal’s workload will continue to increase. At some point, they will be overwhelmed and out of capacity. These business owners will unwittingly become the constraint to growth in their own businesses.
This is a bad situation, but the only thing worse than not delegating when it’s needed is delegating before the proper infrastructure is in place. Doing so can send the business spiraling out of control before the owner realizing what is happening―we’ve seen it all too frequently. Putting the proper infrastructure in place to allow safe delegation means three things:
Q. I have a collections problem in my small business. Recently, accounts receivable have been growing at a faster pace than revenue. We have a particularly large amount of money in the greater than 120 days past due column. What suggestions do you have for solving this problem?
A. Clearly, cash flow is critical. It’s the lifeblood of every business. Without cash flow, businesses die. However, unless your business requires payment in advance, you will probably run into some customers who do not pay your invoices in a timely manner. We have found that following the four tips below will reduce the problems you will have with delinquent payments.
Q. I’ve often heard two widely accepted parables in business that seem to contradict each other. The first is the stonecutter who strikes the rock 99 times with no result, but on the 100th blow, the rock splits. Of course it wasn’t the 100th blow alone that split the stone, but the 99 that went before. The message is persist. Stick to it even when you see no results. The second is the oft quoted definition of insanity which is, continuing to do the same thing again and again and expecting different results. The message is, if what you are doing isn’t delivering results, change what you are doing. Which is correct and how do you know whether to persist or change direction?
A. The answer, of course, is that both are correct, depending on the circumstances. To be successful in business, or any other endeavor for that matter, you have to be willing to persist when times are tough. Like the stonecutter, you have to be willing to continue working hard through patches where there are no visible results. At the same time, success in business requires that you be willing to change course when the current path is not getting you where you want to go. The question is, when to persist and when to change course.