An acquaintance asked me for some help today regarding a speech on entrepreneurship that he was preparing, particularly regarding the trials of scaling up a business. Now, the fact remains that neither he nor I are actually owners of our own businesses yet, but having worked in start-up firms before, one of the first things that occurred to me was, how difficult it is for many entrepreneurs to move a business beyond themselves.
Scaling up a business could face many obstacles, such as lack of sufficient funding, information to enter new markets, poor working capital, or even lack of credibility that a small firm may face when approaching new customers and markets. But sometimes, the difficulties are not material, they are psychological. A business may grow from 1 to 100 employees and still essentially be dictated by the original single person. Now this is not a good thing, for a number of reasons. For one thing, it effectively ties down what the company can do to the capabilities of this single person. However outstanding he/she may be, any business of a significant size needs multiple skills, which can never all be available with one person. The reason for this resting of all responsibility in the single person, is that the owner feels insecure at the thought of “my” business being controlled or even helped along by other people. There is a reluctance to delegate any important decision-making. This is ofcourse not unique to entrepreneurs. Many managers do it too, unwilling to trust subordinates with any significant decisions.
Companies find it difficult enough to function in such an atmosphere, but for an entrepreneur-led firm, it can mean the difference between survival and death. At a practical level, customers may have doubts on the continuity of the firm, if all power is tied up with the owner alone. What happens in the case of any unforeseen event like an accident? Employees start viewing the company solely as a training ground for better opportunities elsewhere, since they know that they are unlikely to grow beyond a point anyways. So even if the entrepreneur decides that (s)he is not interested in scaling up, but remaining a small player in the market, maintaining routine business gradually becomes more difficult.
It is essential therefore for anyone wishing to grow (either in size, or in other ways, such as personal growth by freeing up your time), to be able to learn to delegate. Easier said than done, probably due to the need for control that seems inherent in so many of us! Pam at Escape from Cubicle Nation, one of my favorite bloggers, has written reams on this issue of trying to maintain control over everything, and ending up a wreck in the process. One of her good pieces on this subject is here…