Stages of Entrepreneurial Growth

Entrepreneurialism is a state of mind. We know that. It is what pushes people to start businesses or alter the course of existing businesses. It is what fuels ideas and turns them into evolutionary or revolutionary products and services

It is what makes legends out of Bill Gates, Steve Jobs. Michael Dell, Sergei Brin and many others.

But, stop and think for a moment. At some point each of the above had to shift gears and recognize that they had to become more organized as they became more complex. They had to bring in professional managers to help them build the necessary organization around their entrepreneurial ideas and ideals.

For all of the great ones we hear about, there are many times that number we don't. One of the reasons for that is a failure to recognize that an idea must becomes a more concrete business. Structure must be built around in, not to forge it in stone and make it stagnant, but to support it and give it a foundation for growth.

If an idea takes off in a small company, there should be a plan in place to add systems, process and structure. Those words may set off alarm bells in some, but take them seriously. Those that don't can easily drown in their own success. Infrastructure is needed to facilitate growth

When you start getting hundreds of orders for your widget, you will need someone to fill them, because you can't do it all yourself. You will need some procedures on how to handle fulfillment, how to track it, how to match inventory to orders. And as you get bigger still, the procedures will have to be passed on to more and more people and to the people who manage them, etc. Before you know it, you have a corporate structure in shipping alone.

That structure will need to grow in procurement, manufacturing, order processing, accounting, human resources, sales, marketing, etc. And then all of these areas will have to have lines of communication, reporting and accountability.

I have always urged early stage entrepreneurs to envision their structure early on. It can always change later. But I make them do an organizational chart, even if all of the boxes have their name in them. At least they get the sens of how the organization should work.

As they hire more people, they can remove their name from boxes and put in those of the new hires.

Structural changes should be evolutionary- gradual additions, subtle shifts, well-rehearsed next moves.

Preparing for growth and handling it professionally are keys to organizational success. When I was growing businesses in the 1990s, I found books by Eric Flamholtz helpful in putting things in perspective. Of particular use was his volume Growing Pains: Transforming from an Entrepreneurship to a Professionally Managed Firm. I know that not everybody is a big reader, but this one volume can be a big help in guiding entrepreneurs through tough transitions.

And if you don't want to read but need help nonetheless, there are always consultants such as myself, who work with companies to assist them through the tough stages.

Don't ignore the need to become structured and more professional. That doesn't have to mean bureaucratic; it doesn't have to be negative at all. Done right, this transformation continues to cherish the entrepreneurial spirit, to nurture it and to give it long, sustained life.