One of the most difficult moments for entrepreneurs can be the point when they realize that they can no longer effectively manage the companies they created. This is not an unusual event, but it is most often met with complete denial.
The StartupJournal has an article that shows the struggles that one entrepreneur faced when he owned up to his limitations related to his growing company.
“Mr. Reeve wants to remove himself from all aspects of management and become the company’s chief designer and inventor. This transition is proving easier said than done. The company needs to find a strong manufacturing manager with the ability to satisfy the founder, maintain quality and build profitability. Two managers who were hired in the past three years weren’t up to the task.
Both Mr. Reeve and his wife, Anne, who co-founded and helps run the company, agree something needs to happen quickly. Mr. Reeve is burned out from doing work he doesn’t enjoy.”
There are the lessons that the author of this article, Perri Capell, arrived at from interviewing this entrepreneur:
-Entrepreneurs can be a mismatch for a mature business.
-Management skill cannot always be learned.
-Hiring a successor can be a very difficult task.
Although all of these can be true in many cases, my experience is that if dealt with early enough, many of these challenges can be avoided. I have seen many entrepreneurs make such a transition successfully. It is not easy and the entrepreneur will need to commit to a long term plan not only for the business, but for him or herself. I stress to entrepreneurs that they need to understand that it is not just their businesses in transition, but they need to transition, as well.
One of the best books I have even read on this topic is Growing Pains. It was my Bible during this transition period in our business. The good news for young entrepreneurs is that many are learning about managing growth in their formal education on entrepreneurship. The rest of us old dogs will need to try to learn this on the fly.

The economy is growing and employment is up all across the country. Good news, indeed.
But, what this means for small business folks is that it is time to start engaging in more deliberate and longer-term staffing planning. During the last big economic boom, the single biggest impediment keeping the entrepreneurs I was working with from growing was staffing problems. They could not hire the right people when they needed them to take advantage of a growing market.
So here are a few things to keep in mind:
1. Keep Staffing Forecasts Current. Even if you are a small business, you need to think down the road for the next two or three years to anticipate what your hiring needs may be. Forecasts should be updated every few months to adjust for changing conditions and the changing state of your business.
2. Base Staffing Plans on Milestones, not on Time. Never tie your staffing plans to the calendar. The passing of six months is not what will require you to hire new employees. Know what the triggers are in your business that will necessitate more employees. For example, it could be things like a certain number of clients, sales levels, or production levels for employees. More managers and supervisors it should be based on the number of first line employees each can effectively supervise. And don’t forget the needs of support staff in areas like billing and sales.
3. Measure Your Employment Triggers. Work with your bookkeeper or controller to give you quantitative reports on your key employment milestone triggers, and insist that you get these reports regularly.
4. Never Just Hire Warm Bodies. Hiring someone just for the sake of hiring rarely works. Mediocre hires make mediocre employees. This will only postpone hiring the right people and force you to get rid of the dead wood you just hired first.
5. Know Your Hiring Lead Times. It takes time to get employees up to speed. Know how long it will take to recruit, hire, and train new employees for each position you are planning to hire so they can be ready to work when you really need them.
6. Don’t Forget to “Close the Bank Door”. The single best staffing tool you have is retaining the good employees you have right now. Create a culture that makes good employees want to stay with you. You may have to pay a little more that you’d like to, but it is much more cost effective that constant hiring and training. And staff shortages can be very costly in terms of lost revenues.

A great example of in importance of keeping focused and grounded during growth can be found in this article in the StartupJournal. During growth entrepreneurs face a multiple of decisions, each of which has the potential to make or break the business. Also, the entrepreneur must struggle to build a company that has the systems and infrastucture to support growth without at the same time eating up all of its scarce cash.
When facing growth, remember that ultimately there is only one type of growth that matters: profits. Never just chase sales for the sake of more sales. Only grow your sales if they also grow your profits. Profits will not “just happen” as you get bigger and sell more. They must be planned for and engineered into your business.

Rob over at BusinessPundit recommends a book that I am definintely going to buy: Ram Charan’s Profitable Growth. Go for batting average, not for homeruns. Focus on growing profits, not just growing revenues. Some of the best words of wisdom we can off any entrepreneur!

The Small Business Blog has a link to an excellent article at WSJ.com on the perils that small businesses must plan for when they face explosive and sudden growth.
Stories like this remind me of one of my favorite business parables: There once were two old dogs on a farm that spent their days chasing every car that passed by. Day after day, week after week, month after month, year after year, they chased cars all day long. Then one day they actually caught one. At that moment one of these old dogs turned to the other and said, ?Hey, we finally caught one of these things!! But what the heck do we do now????!!!?

Here is a quote that Dr. Susan Williams of Belmont University passed along to me. It describes so well the experience that many of us have gone through as our businesses go through periods of rapid growth and change. For me it describes both what I experienced and what our business experienced.
“Everything alive is surprisingly alive– and on a twitchy, searching, self-aware, self-organizing upward journey. Such living systems periodically break into severe twitchiness and appear to fall apart. They do not. It is actually at such vibrating times that living systems are shaking themselves to higher ground. Transition to a higher order is universally accompanied by turbulence. The disorder and disharmony is a necessary activation of growth to a higher level. The greater the turbulence, the more often it will go into apparent disharmony in order to re-jiggle itself to a higher level.” Ilya Prigogine, Nobel physicist.

I have been getting more and more calls from folks thinking about opening up a retail business. This is typical as an economy begins to recover. Probably the single biggest risk, especially in the days of big box stores like Best Buy and Wal-Mart, is poorly manged inventory and pricing. We offer this classic article from the archives of INC magazine to any of you who are thinking about or acting on a plan to go into retail or are expanding your current retail operation.

I bought my first copy of this book when our business was going through our insane period of growth. It was called something on the order of Making Transitioning from an Entrepreneurship to a Professionally Managed Firm in its first edition. Thank goodness the marketing folks helped rename it Growing Pains in later editions. My copy became quite “dog-eared”, and I ran into more than one other entrepreneur carrying this book along on a flight to somewhere. It is a must read and a great reference book for any growing company!