There is a popular myth in Australia that keeping a business small is a good lifestyle choice and a way to avoid the stress and challenges of a larger business.
Despite the myth, most small business owners constantly deal with stressful situations and many daily crises in their businesses.
Australia has almost 2 million businesses with 5 or fewer employees, over 80% of all businesses. Most of these businesses struggle to be successful and will never grow beyond this level. For many, this is not a deliberate choice, but the result of a lack of confidence and ability of the owners to manage growth.
Crisis points are natural for businesses that possess the potential to be much bigger and more successful.
The failure to progress through such crisis points creates unnecessary stress and keeps many small and medium-sized businesses from ever achieving their full potential.
It would ultimately be much better for business owners to learn how to grow a business successfully, rather than blindly accept that small business is a better lifestyle choice.
The most successful businesses are those that break through these growth barriers and provide their owners with financial independence and freedom to enjoy the most enviable of lifestyles.
The five Distinct and Predictable Stages to Growth and Business Success
As a business grows it will encounter five distinct and predictable stages.
- At the “creative” start-up stage, a business is heavily reliant on its owners, who participate in every aspect of the business. With growth, this reliance becomes unwieldy, creating a crisis of leadership. Someone needs to take charge and organise specific responsibilities for people.
- In the second “directive” stage, the leader is responsible for making most decisions and directing others. However, as the business grows, the responsibility for all decision making becomes too great.
- This leads to a third stage of “delegation” to relieve the pressure, but businesses often fail at this level due to lack of control. Businesses need to develop better control systems to break through this barrier so that efforts can be better coordinated.
- But with further growth the controls evolve into red tape, where bureaucracy becomes an end in itself and constricts the business with over-tight rules.
- At this point, the business needs to modify control barriers and develop a more collaborative style of organisation to move to the fifth level.
These growth stages were identified and publicised 40 years ago by Harvard’s Larry Greiner.
Awareness that these growth barriers will be met means they can be anticipated and the associated stress avoided by developing strategies to assist the transition through each stage.
Many small business owners are obviously not aware of this, because they regularly hit growth barriers which become permanent obstacles to growth, rather than temporary hurdles.
The key message is that the desire to retain a small business puts a lid on potential and unplanned growth creates stress and, in most cases, unnecessary risk for the business.
Many more small business owners would break through the business growth barriers with better foresight and planning to anticipate crisis points and chart their transition through each level.
Well-established strategies exist to enable business owners to bring about successful growth of their enterprises.
The benefit to business owners who seek out and use these strategies is less stress and managed growth.
With this increased control and lower risk comes the achievement of higher potential, greater freedom and a better lifestyle!