Growing a small firm into a large business can be a difficult task requiring vision, organisation, determination and continual change. That’s the view of franchisor and Ernst and Young 2010 Entrepreneur of the Year finalist John O’Brien, chief executive officer of national pool and spa care network PoolWerx.
O’Brien knows how hard it is to make the shift from business owner to leader of an international company and said in his 30 years of business he had witnessed many businesses fail.
“There is quite a leap to be taken in order to successfully transition from being a small business owner to leader of national company or franchise,” he says.
O’Brien believes one of the biggest mistakes preventing a successful transition is the inability to plan well.
“Growing too quickly without the necessary structure to handle the increase in business can prove fatal,” he cautions. “Business owners can help themselves by being strategic and organised about the growth process. I created 10 and 20 year plans, spent a further 12 months developing systems, manuals, organisational and human resource structures before going ahead with the transition.
“It’s also essential to have a clear picture of where you want to go and what you want to achieve because at some point everyone will lose focus and it will be up to you to see it through.”
O’Brien has grown his national pool and spa care network considerably since purchasing the company in 1992. In 2009/2010 the company achieved a 10 year growth milestone from $3 million to $63 million with a compound growth rate of 39 per cent.
But the process has not been without challenges, admits O’Brien. He recommends a number of strategies for ensuring smooth and sustainable business growth.
“The most important and obvious element is weekly monitoring of cash flow. You need to make sure you are watching your debtors and creditors like a hawk. It’s also vital to maintain close relationships with suppliers, have ongoing access to capital, set key performance indicators for all areas of the business and delegate appropriate responsibility and accountability among your team.
“Establish rigorous monthly reporting and checking mechanisms and hold meetings with the executive team once a month to review performance across all key sectors of the business such as operations, marketing, IT and human resources.”
As a business grows leaders face new challenges not least the need to modify their management style to accommodate growing staff numbers, develop better systems, finance expansion and manage employee retention.
For O’Brien it is a priority to meet each one of the franchisees in the Poolwerx system at least once a year.
“You can’t lose sight of what made your business great in the first place. It’s crucial to stay in touch with your team in order to get their feedback and to understand what is really happening on the ground in each area. Any lapse can result in losing market share or failure to capitalize on new trends or opportunities.”
And he warns against accepting mediocrity and the failure to adapt.
“So many business owners are happy to go along with the flow — their bills are being paid and things might be ticking along — but there is no real drive to move the business forward.
“As the leader of a company it’s up to you to constantly change the way you do things and how you look at things and how you deal with people and share the vision of the company. You have to be prepared for growth and change and all the challenges that come with it. If you aren’t how can your company be?”