The Complexity of Business

A common issue for small business owners is the relationship between business skills or management capacity and the complexity of the business.

If you start a new small business slowly, you may be able to handle everything yourself. If you only have one or two products or a limited customer/client base, your systems can be quite simple. But at that simple level:

• Can you be financially sustainable?
• Will you generate enough sales and cash flow to reach break-even and be profitable?
• Will you be able to hire an employee to help you in the business?

To create a self-sufficient business, you will need to scale up and this will increase your business’ complexity. As you do this, your business skills and management capacity must keep pace and be in balance. To grow the small business, things get complicated… perhaps more than you can manage well.

• Is it better to wait until you have all the skills to handle the increased complexity?
• Do you grow now and hope you develop the skills “on the fly” to be successful and sustainable?
• Should you hire someone with more expertise to help you?

This is such a critical area. To meet your business’ increasing complexity, there are six essential areas:

1. Pay attention to the your weak links.

Your lack of skills in any key area of your business can limit your success. You know your areas of weakness may be cash flow, operations or managing others? Identify a key weakness and make it a strength.

2. Improve your own business skills now.

Find the help you need NOW before your current knowledge limits you. Take a class, follow relevant blogs, finding a peer mentor, or a business adviser. Put time aside for your personal business management education.

3. Bring in others with the skills you need.

You do not have to know how to do everything! Be smart and hire someone who is better than you - an outside professional or an employee with skills in the specific area such as a bookkeeper or an employee good at sales.

4. Take a leadership role.

You may love making your own products. But to have a successful business you may need to find a way to make the product at a cheaper price – an employee under your supervision, or an outside co-packer.

5. Put good systems in place.

You cannot take on larger projects, additional clients or more employees without clear, documented systems. It is hard to hire and train someone if it is written down. Without good systems, it is also harder to take a break!

6. Don’t stop planning.

Growing a business can feel like a set of spiral movements. Your careful responses to challenges creates a foundation for growth. Planning helps take the pulse of your business. So, identify your weaknesses, challenges and opportunities and create a plan to take your business to the next level.