The dream of most entrepreneurs is to grow their business. However, experience shows that it is much easier to run a company of a stable size than one that grows rapidly and in which everything is constantly changing. A growing company requires a change in management style, organization, and many other things. Growth from a microbusiness to 50, 100, or 200 employees carries a lot of challenges for which you are probably not prepared at the beginning of this path. But there are many steps you can take to reduce your risk and make it easier.
Companies that started with an idea, the work of the owner and a few people from the family, in a tiny room, garage or hall, grow and start employing 10, 20, 50, 100, 200 employees. They gain customers from other countries, often from all over the world. Turnover is growing rapidly and the company is becoming an increasingly complex organism. This process can take 10, 20 years, but it can also be very lightning-fast and shorten to 5 years.
What are the most common features to implement in your company?
KPIs For Every Employee
KPI — Key performance indicators, or performance indicators, to one of the simpler tools helpful in managing almost every area of the organization (and a part of performance review process). Under this three-letter abbreviation, there are measures that allow you to evaluate the functioning of the company, identify areas of ineffectiveness and change over time. In the answer to the post, I will try to briefly describe the mode of operation on these indicators and show some examples of KPIs recently.
Educational training or meetups
The times when the education process ended with college are long gone. Now, when the labor market gives us more and more opportunities, the choice of employees is growing. Additional, and acquiring new training courses to advance and broaden your career prospects. Employers take this into account, as they ensure that their employees have a chance to do technically.
The issue of employee development is extremely important now — both for employees and employers. Getting to know the opportunity to gain knowledge and experience, new knowledge, and experience is a key argument for establishing a permanent relationship with the company or looking for a career outside its structures. In turn, for employers, the availability of employees with competences is extremely important, because only thanks to them the card is the achievement of goals and building a competitive advantage.
Employee benefits can be various types of benefits that are offered to an employee in return for the work performed by him. We can divide them into compulsory and non-compulsory services. Mandatory benefits that the employer must provide to his employees include, among others: workwear or protective clothing, equivalents for washing clothes, regenerative meals and drinks for those working in particularly difficult conditions, cleaning agents and medical examinations. When it comes to additional benefits, they may include: medical care, telephone and company car, covering the costs of commuting to work, packages and vouchers, courses, training, studies, as well as a fee for renting an apartment. All employee benefits are a cost for the employer, but unfortunately not all of them can be counted as tax deductible costs. We can only include in costs those services whose purpose is properly justified by us.
Defined Roles And Responsibilities
As you grow, new customers arrive, and new orders arrive, your own limited time becomes your biggest worry. And a murderous race begins: you hire more employees, delegate some tasks. There are new tasks, new clients, new challenges. You hire more employees to solve new problems. As the number of employees grows, new needs arise, for example, HR department, controlling. You hire more employees. You are also constantly developing the sales department. The Marketing Department appears. And more.
When you fall into this reel, on the one hand, you enjoy the growing turnover and size of your company, you feel that everything is going in the right direction. On the other hand, you run into more and more rush, frustration, and confusion. More and more areas are demanding your attention, more and more people are asking questions and asking for decisions. You have less and less time to rest. And more and more you feel that you are losing control of what is happening. Probably, what will finally push you to seek help will be the imminent financial problems.
A new way of managing and new skills
This difficult situation comes from the fact that when everything happens so fast and dreams seem to come true, you forgot that a microbusiness requires a different management than a small company, and a small company is completely different from a medium-sized company. Moving from one level of business size to the next requires a change in organization, the way you manage, and the growth of your managerial and leadership skills. It seems cliche, but life shows how often entrepreneurs overlook it.
You also need time to perfect your skills and expand your knowledge. And very often it is not the costs, but the lack of time that causes this area to be neglected. Start to use the HRM system, it really helps you quickly to manage your employees.
Growing Clutter and Chaos
Chaos in the company generates costs. The challenge that grows small businesses inevitably faces is increasing chaos. If you’ve already noticed that profits grow much slower than turnover, then you can see how much your organization has grown. Especially back-office departments that do not directly generate profit, but are essential for the whole to function.
When you take a closer look at it, you will see that back-office operating costs are rather independent of turnover. The growing business required the creation of a large machinery, and the cost of maintaining this machinery is an overhead. This means to you that even if your turnover starts to decline or the season becomes weaker, you must ensure that these costs are covered. The risk of an operation has therefore increased significantly. A colossus has been created that you must keep now.
The HRM platform improves many processes in the company — from recruitment, through training and employee development management, to strategic management of the organization’s effectiveness. Implementing an IT solution in the HR department does not have to be difficult. It is enough to plan a few simple steps, thanks to which the implementation of the HR system will be quick and efficient.
Implementing an HRM system is always a project. In order to be successful, you need to answer a few key questions and plan individual stages that will avoid generating unnecessary costs and possible problems. There are a great variety of HRM systems on the market, you can choose the most useful for you. By the way, in BrainyHR you can hold all personnel processes in one HR CRM system that is created with care for each team member.
The main problems of fast growing companies are:
- The mess grew with your business
What I want to draw your attention to is the mess that grows with your business. The way your business is organized, which was sufficient when it employed 10 people, can be the height of chaos when it is several times larger. In a smaller company, some simplifications and shortcuts are natural, because there are few people who can easily communicate.
In a larger company, all these shortcuts and simplifications duplicate tasks, there are tons of misunderstandings, ambiguities, waste, and areas that no one has addressed. Your company has grown, but so has the internal mess. Unfortunately, this mess now generates considerable costs.
Of course, this is the high time to start organizing processes in the company, the circulation of documents and information, improve work organization, and adapt systems. This is the time to implement standardization, automation, and as many system solutions as possible.
- Difficulty transforming
Unfortunately, these are very fundamental changes, often involving the entire organization and all employees, led by you. And, of course, in a rush to earn money, no one has time for these projects. In addition, they require changes in human habits, and this is the hardest part.
The process of organizing organizational clutter, although crucial for further development, is extremely difficult. Imagine you had a gazebo on a plot of land that new residents had moved into over the years, and each new one had added a little room or two, with materials that suited him, in a form that suited him. Now about a hundred people live in this building. The layout of rooms, aisles, entrances, lockers, stairs do not meet any standards.
And if you want to finally replace the electrical installation or sewage system with a modern and much more efficient one, sometimes the easiest solution seems to be to tear it down and rebuild it from scratch. It is not known what to do with the inhabitants at that time.
It is similar to your company. Changes in its organization should usually cover all areas of activity. And it’s impossible to stop the business. In addition, the most competent people, who should be leaders in this transformation due to their experience, are the most busy with current activities
- You can’t build an empire without support
One of the more difficult challenges faced by owners of growing small businesses is the lack of support. It seems that as you employ more and more people, you cannot complain about the lack of support. However, this is only apparent support.
As I mentioned earlier, as the company grows, the way it is managed must change. When your company had 10 employees, it was still possible to peek into every corner and control what was happening in it almost manually. When the business grows, you hire new people, but old habits stay.
Do you have middle management candidates?
Usually, at the beginning of the company’s growth, you hire people for specific tasks. And you leave the role of the sales manager, finance manager, production manager, operational manager to yourself. In a small company, this is completely normal and advisable (I advise my clients this way myself). However, when your company employs 50 or more people, the number of individual topics that need to be dealt with in each area grows so quickly that one person cannot control them.
On the other hand, employees, so far used to micromanagement by the owner, are not prepared to take greater responsibility, are not sufficiently independent, and do not have the competence to take over some of the managerial responsibilities.
A gap is created — the company begins to need managers and managers who can control groups and departments on their own, but there are no suitable people on the team.
- To educate your managers or hire new ones
In most businesses, a dilemma arises at this stage: Is it better to entrust more independent managerial positions to the best employees from the current team? Is it better to hire experienced external managers?
There is no single right answer to this question. Each solution has its advantages and disadvantages.
Therefore, when deciding to provide promotion opportunities to existing employees, it is worth remembering that they need a very fundamental change in the way they function, a large set of new knowledge (managerial and business), support from superiors and coaches, and training leadership skills. Even with a lot of support, such a promotion is not always successful.
The saying goes that if you have a very good trader and you make him a commercial director, then you will have neither a good trader nor a commercial director. Therefore, be very careful with fundamental changes to the job profile. However, I do not exclude their legitimacy in many cases.
On the other hand, hiring outsiders at the mid-level may be more expensive and more difficult to accept by an already employed staff. New employees do not know the specifics of the company’s organization and its products so well, which can make implementation difficult for them. Especially since their first task is to create a position that did not exist before.