NFIB

The Smart Way to Grow a Business
03/ 29/ 2004

by Jeffrey Moses

During the start-up phase of a small company, the founder is often the company. But as the company grows and the owner adds employees and expands financial resources, the owner needs to structure operations so that the company's success is not overly dependent on his or her activities.

As stated in the book, The Owner's Manual, by Jim Altfeld: If a business is solely dependent upon [the owner] for its survival, the business:

* Is of less value to a prospective buyer;
* Is in jeopardy of a serious owner health event;
* May have a short-term future;
* Will seldom, if ever, be in a position to prevent a foreseeable problem or disaster from occurring.

Unfortunately, too often the owner believes that only he or she is capable of doing what needs to be done in order to grow the company. Many owners believe that their company will fall apart if they are not there. The result? They can't even take a vacation, are forced to work days, nights and weekends, and are not able to structure the company so that it is valuable to others when the time comes to sell.

Altfeld, who has spent more than 30 years working with CEOs and owners of small businesses, offers the following suggestions to help structure a company so that employees are empowered, and so that the company not only can exist without the owner being present, but can grow during the owner's absence.

Understand your company's core competencies (i.e., what makes it tick and allows your business to do what it does) and your core business (i.e., what business your company is really in). Next, create a vision and mission for your business based on what you believe your company can become. These should be complete with milestones, dates, financial figures and growth projections. You should also include personal financial and freedom goals, based on financial projections for the company.

Validate your employees. Involve, inform and inspire them. Remember that people support only what they have helped to create. Allow your employees to help create the vision, mission and objectives.

Create a culture that grows and develops its people. To facilitate this, implement an internal mentoring program and career-path awareness whereby employees can be assured that their efforts will be rewarded with career growth.

Identify the systems and processes that are now in place throughout your company and rely on your employees to make the systems and processes more efficient and more effective.

Get the right people in the right place. Assess, evaluate, improve, rearrange or replace people. Try to convert the non-believers, but remove any person who is unwilling to buy into the vision, mission and culture of the company, regardless of their length of time on the job.

Get all employees to understand that what they do affects everyone else in the company (including those who come after them) and ultimately the customer. No one works in a vacuum.

Build a strong second-tier management team that can take the company to the next level. The future of the company is built on these individuals. Create a company of leaders by delegating leadership responsibilities.

Hold everyone, including yourself, accountable. Put measurements in place. Make certain departments and employees know their roles, what they are contributing to the business and for what they are being held responsible and accountable.

Raise the bar by bringing in top talent. Encourage current employees to rise to the challenge set by higher standards.

Finally, eliminate the position of owner in the minds of employees. People will not give entirely of themselves if they feel they will not ultimately benefit from their own efforts. It may be ideal to say that each employee should feel like the owner of the company. But it is a practical necessity to instill the belief that each employee will receive back 100 percent of what they contribute.

Jim Altfeld is an NFIB member. He can be reached at jaltfeld@altfeldinc.com. His Web site, www.altfeldinc.com, is a wealth of information for business owners and managers. The Owner's Manual ($24.95) can be purchased through Amazon.com or by directly contacting Altfeld Inc.