Scaling a small business - DC Strategy
by
DC Strategy
The very thing that makes a small business successful — the role of the founder and its operating systems — is often what challenges significant growth and the transition from a small business to a medium / large enterprise.
So what does corporatising a small business involve? First of all, the business must consider the effect of the founder(s) and transition away from its reliance on key individuals. This often means creating a corporate brand image that leverages but does not rely on the founder as the figure-head – make the brand more important than the company's individuals. Consider also the company structure to ensure that key responsibility and direct reporting lines do not all lead to one person.
Often, company structure and governance structure are mistaken as one. The latter decentralises decision making whilst ensuring that each stakeholder understands the strategic objectives of the company and operates as a cohesive unit. Making the transition from reactive to strategic growth is critical (not all opportunities are created equal) and the company strategy must be communicated clearly through the management team to the broader group.
To achieve this, a 'Growth Management' board is usually formed. This board comprises of key management and meets once a month to communicate, focus on and refine developments in each unit, whilst ensuring each stakeholder is involved in the decision making process. To complement these, weekly management meetings are beneficial as these allow greater focus on operational issues. This is particularly important during phases of high growth or in evolving businesses.
To ensure the Growth Management meetings are effective, a reporting framework that covers company growth, operations, people and finances must be established. The financial reporting, for instance, should not only cover the profitability of each part of the business but must also capture variables which have been identified as key drivers of businesses performance.
Lastly, if sales are a function of the business, ensure that the sales activity is proactive and relies on systemised tools and processes rather than the experience of a few.
DC Strategy is the region’s premier franchising specialist with an experienced and respected team of specialist franchise consultants and specialist franchise solicitors. As market leader our extensive practical experience ensures our clients have access to the latest franchising know how, outcomes, trends and developments to grow a better and more valuable business.
02.05.2008
FCA Member
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