When entrepreneurs start a business, says Mike Lander, they are often fueled by a passion to solve an existing problem in a non-traditional way, disrupt an existing industry or simply strike-out alone because they believe they can do it better than their existing employer. However, once the entrepreneur manages to get the business to a modest scale (typically around £1m+ turnover), they start to realise that the next stage of growth requires a whole new set of skills and experiences which they either don’t have or, have no interest in developing themselves.
In my experience, this is the very time when entrepreneurs look for someone to fill a particular gap which is to take care of running the day-to-day business whilst they get on with what they do best which is often innovating, evangelizing, selling, etc.
So, the question for the founder/entrepreneur becomes:
How do I stop getting bogged down with the day-to-day aspects of the business so that we can get to the next stage of growth and sustain the passion and drive I started out with?
In the corporate world, this is often when a Chief Operating Officer (COO) is brought in (for a good example, look at the case study when Ray Lane was brought in to Oracle by Larry Ellison). However, in SMEs, this seems like a grandiose title where what is actually required is a head of operations, or sometimes, an MD. The activities this person typically takes off the founder/entrepreneur include:
- Streamlining Finance/reporting and implementing a strict debtor/creditor payment process plus critically, a weekly cash-flow forecasting system
- Setting and managing the budget cycle
- Running the management team weekly meetings (assuming they exist)
- Implementing Sales/Marketing management systems and processes to get more predictability and accountability into the sales cycle
- Implementing recruitment systems and processes plus general HR issues
- Overseeing customer (and supplier) contract management
- Running IT infrastructure and mobile phones
- Running Customer service/operations (making sure the “trains run on time”)
As the business grows, don’t force the founder/entrepreneur to take on roles that they aren’t suited to (or skilled at), instead, recruit someone better suited to the job that makes the business scalable beyond the entrepreneur.