2 Entrepreneurial Competencies That Lead to Business Growth
Several weeks back I wrote a post titled Entrepreneurs Build an Asset NOT Just a Job . In it I began to present the difference between small business owners and entrepreneurs. While there are many differences and similarities I find a key competency of an entrepreneur is the ability to understand the necessity of scalability and sustainability in a business.
Scalability is key if growth is your business goal. While many would say sales are the key focus, I would argue that sales are only one key focus, because if you cannot scale your operation to meet the demands created by sales your growth will be short lived. You’d be amazes at how many small businesses out there have this problem.
I have a very good friend that is one of the best sales people I’ve ever met. Everywhere he goes since I’ve known him he has successfully raised sales beyond ownership’s expectations. But soon my friend is disillusioned because ownership cannot cope with the increase in sales. Operations begin to fall behind, customers begin to complain, and soon ownership is asking sales to slow down. Slowing down is not something a good sales person wants to do!
On more than one occasion I have been called in to try to assist. In all occasions, I have witnessed owner pride and unwillingness to admit that they do not want to grow. The result is the beginning of the end for the business for the owner and my friend begins seriously looking for the next company for which to sell.
So what caused the problem here? Scalability was applied, but only to the sales function. When sales met the capacity of the operation the owner did not have the skill required to grow it. Or, I more frequently see the case that growth isn’t really what the owner wants. What they really want is sustainability!
Sustainability is allowing something to run on its own. You may say “yeah, that’s what I want for my business, having it run without me being there.” Many small business owners REALLY want sustainability and not growth, but they don’t realize it. Then, when they try to grow it and find out it’s not what they want they are embarrassed to admit it!
Creating sustainability for a business is not easy, and it is not an innate talent you are born with. Sustainability means delegating and letting go. This is a very hard transition for many small business owners. But, when you’ve learned to do it you have mastered a talent that will move you into the realm of entrepreneur.
So where do you begin? From a technical perspective you first need to know where your capacity is all along the revenue cycle. That means a Revenue Engine Analysis to understand where you need to grow first, second, and third along the cash flow cycle. But I believe what is even more important, is looking in the mirror and asking yourself “what do you really want your business to become?” This decision in a critical fork in the road for your business and the post titled 4 Owner Objectives to Achieve the Self-Sustainability Stage of Business Growth is a good source of information as to which direction you want to take your business when you reach the self-sustainability stage of the small business growth cycle.
How many of you find yourself in this quandary? For those of you that were there and have moved past it, how did you do it? You story may help others get beyond the point of small business owner and mover them into the realm of entrepreneur.