My Business FD's Chris Chapman has lived through those transitions and as we hopefully enter an era of increased prosperity, he offers some advice for the ambitious entrepreneur.
The UK economy looks to be on the upturn. The latest GDP figures, released in November, show economic growth is up by 0.8 percent, with predictions from the National Institute of Economic and Social Research (NIESR) forecasting this figure will be 2.0 percent for 2014.
ICAEW, the body representing English and Welsh accountants, also reports that the UK is the fastest growing Western economy. The services sector is particularly strong, with the pace of growth at its highest in 16 years. Other areas experiencing a boost include construction, which is up 6 percent, fuelled by the demand for houses. Meanwhile the British Retail Consortium reports that sales grew by 2.6 percent in October.
All this positive news means one thing: businesses will be looking to grow to capitalise on the new opportunities presented by the improving economy. But My Business FD founder and joint MD, Chris Chapman, believes that while growth is to be welcomed it does present some challenges.
Leadership becomes an even more essential skill as a business gets bigger. “It’s a question of moving from hands-on doing to directing. A business will never be able to scale up if it relies on the CEO to do everything," explains Chapman.
This is all too easy a trap to fall into. In the early days business owners must turn their hand to everything from IT to finance, as it’s sometimes too expensive to hire staff to handle these specialist tasks. But the key to successful leadership within a growing business is to move from working in your company to working on it.
“The CEO should be strategizing, leading and motivating the team, giving the business direction and leadership. To free-up the time to look at the bigger picture it is vital to delegate core functions to a capable management team who have expertise in specialist areas like Marketing, HR, IT or finance,” advises Chapman.
Of course, as more staff join the business any then the leadership role evolvesnd as the CEO moves away from the day-to-day details the focus should shift to identifying key drivers of the business that will make a real difference to the performance. “Being a leader is more about managing the team than knowing every detail of the product, after all that’s what you hire a great product manager for,” says Chapman.
Behind every successful business there is a great team. “To create a thriving business you have to have a strong management team you can trust. Choose people you respect and who have expertise in complimentary areas. You need staff you can trust to fill in any skills gaps you may have, so pick a great team with people responsible for product, sales, marketing, HR, finance and so on,” he adds.
“Keep your team small to ensure it is productive. Too large a team can make it hard to make decisions or to have effective discussions. Remember to lead from the top and delegate tasks with conviction. After all a strong leader makes for a strong team."
Once you have a team in place the next critical step is to ensure that you get the best from them. “The best way to keep your team on track is to lead by example, deliver on your promises and make the team believe in the goals for the company and why it will succeed. This means you have to show a clear direction for the business and inspire your team to help you take it there.”
If you can share your passion for the company this will make employees feel proud to work there, which means they will work harder to make it succeed. Give feedback on performance and encourage staff to find solutions to problems without resorting to asking the boss.
It’s also vital to take an interest in your team, to make them understand their role and why it really matters to the business. You need to take an interest in them and help to drive them forwards; so provide training and learning opportunities to help them grow their skill-set to improve your business. Finally, don’t be afraid to restructure where staff are not performing or failing to adapt to the changing needs of a growing business. Not everyone is suited to fast growing businesses or larger organisations with more structure.
Flexibility is key to ensuring that your business is first in line to take advantage of any new opportunities, so when it comes to your business plan you should never be afraid to change it.
“Always be prepared to flex your business plan, to change course or to adapt key assumptions," says Chapman. "Listen to your clients, learn from market feedback and once a decision needs making, make it quickly before your competition catch up."
Change may be driven by new regulations, by competitors, by new technology or any number of other factors, but the main thing is that you need to keep up. If you can’t remain open to new ideas or identify new opportunities and adapt your business plan accordingly you will never be able to grow your business to reach its full potential.
The final factor that will help to make the process of growing your business as smooth as possible is to create an effective business strategy. A business strategy should identify your customers and their needs, defines your products and services, include a marketing and sales plan, set some financial goals and determine what resources, staff and equipment you require to meet demand.
Get these fundamentals right and you will put your business well on track for future growth.
Chris Chapman
www.mybusinessfd.com
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