Growth Stages Operations Team

Chaos reigns – but does it always have to?

Chaotic periods can destabilize a small business, and sometimes it doesn’t take much. Some of it is just part of the company’s growing pains.

Isn’t this a familiar scenario? Your sales are coming in fast and furiously but you don’t have the staff to handle it. Perhaps your sales cycle is too slow or you can’t afford to pay for the resources you need.

“You have a moment in the life of your company when the team is working 12 hour days just to catch up and service the demand of your product or service,” says Ricardo Weisz, a consultant with Florida SBDC at FIU, a small business development center within the university’s College of Business. “It’s always a challenge.”

Lil Roberts, CEO of Xendoo, a South Florida startup that provides bookkeeping and accounting services to small businesses, knows that challenge well. For a growing company like hers, it’s a balancing act, she told me. You don’t want to hire too soon and have people sitting around, and you don’t want to hire too late and crush your team, she said.

“The solution there is knowing it is coming and being prepared for it as much as you can,” said Weisz. “You may need to seek funding to fuel that growth or understand and accept there will be an extended period of hard work,”

A small business may be able to better vet their customers and adjust their current workflow by dropping  those clients that are lower profit or that don’t fit your business model as well, Weisz said.

“Sometimes it means saying no to things. You are so used to saying yes. It’s tough to tell a client you can’t service them anymore. It’s tough,” said Weisz, who is also running a small business himself and is experiencing these growing pains.

Chaotic periods can beyond your control. With a small management team if one member has health issues it can destabilize company, “It’s very hard to plan for that but it can really take a leg out of the company,” said Weisz.

The good news is that in many cases, chaos can be controlled – depending on the egos involved.

Weisz has seen this happen many times: The business’s founders are siblings or have been friends all their lives but they cannot work with each other. They have nasty fights in front of other members of the team. This can drive a company to its early death.

Weisz said this is much more common than you’d think.

A tech company he advised had a strong team, a disruptive product and early funding.  The founders were successful in previous entrepreneurial ventures but they couldn’t get along and neither was willing to step aside “The founders couldn’t get their act together to take the company to the next level and that killed the company,” Weisz said.

In that case, one of them had to be willing to be bought out, but neither was. Another chaotic situation Weisz says that is also preventable is when a CEO has a great skill set for getting a company off the ground but doesn’t have all the skills needed to be a success with a large growing company. When he or she is not willing to hand the reins to someone who does, what results is friction and chaos among the team, investors and board.

Here are six things a small business entering its growth phase can do to try to minimize the chaotic periods, with recommendations for further reading on GrowBiz:

  • As you are preparing to scale your company, hire team members experienced with taking products or services to market in your industry. [See related post]
  • As much as you can, plan for your growth by securing funding ahead of time to make key hires, maintain orders, purchase supplies or equipment and ramp up customer service. [See related post and another one here].
  • Build planning and forecasting capabilities within your company, so that you can foresee problems before they surface. [See related post]
  • Make sure you have key systems and processes in place, such as for rapid hiring and training, as the needs arise. [See related post and another one here]
  • Be transparent with your team about the chaotic period you are experiencing. Speak frankly and frequently. [See related post]
  • Focus on your end goal, always with your company’s values to guide you. [See related post]

Please send GrowBiz topic suggestions and feedback to GrowBiz@FIU.EDU

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