Predicting & Overcoming Business Growth Barriers

All Blog Posts, Business, Change, Vistage Peer Groups / 18.11.20130 comments

I recently met with a successful entrepreneur who had grown his company to over $4.5M in revenues in just a few short years. He knew he needed a CEO Peer Advisory Board to help him take his company to the next level, but didn’t see how he could squeeze in a monthly peer group meeting in his already packed agenda.

He found himself starting work at 3:00 am to work on client projects, meeting with up to 10 customers a day, and then doing more project work in the evenings.

Like many business owners of companies with less than $5M in revenues, he was so busy selling, serving customers, and putting out fires, he felt he needed to clone himself before joining a group.

It is often said, “What got you here, won’t get you there,” and nowhere is this truism more evident than when trying to profitably grow your company.

Most entrepreneurs struggle with very predictable barriers as they grow their companies from $1M in revenues to $10M and beyond.

Predictable Business Growth Barriers

According to Vistage speaker Jim Alampi, who spent a half-day with my Minnesota Vistage members, there are three types of barriers that crop up at each stage of business growth:

  1. Leadership
  2. Systems and Structures
  3. Market Fundamentals

Top-down leadership changes are not always easy, but Jim Alampi showed my Vistage Group members what leadership barriers to expect and what key areas to focus on.

Common Leadership Barriers to Growth

Startup Growth Barriers: Processes & Chaos

When your company has 10 Employees, the most common barrier to growth is a lack of processes and funding to hire seasoned professionals. These limitations can create a sense of chaos for an entrepreneur. This disorganization needs to be resolved to take the enterprise to the next level.

Small Business Growth Barriers: Delegation & Titles

Once a company grows to between 50 and 75 employees, micromanaging can quickly become overwhelming. In order to take a small business to the next level, it is important to hire the right talent and delegate tasks.

Midsize Business Growth Barriers: Growing Middle Management

Companies that manage to grow to around 200 to 400 employees need a strong middle management group. Finding, recruiting, and growing an entirely different level of leadership is essential to becoming a large, profitable organization.

Large Business Growth Barriers: Organizational Structure & Focus

Once a company has a strong middle management team and grows to 1,000 employees, it is important to make tactical decisions regarding profitability and organizational structure. Great companies focus on the contribution margin line instead of the gross margin line. These companies ask themselves whether they really make money selling all products to all customers.

What Great Entrepreneurs Focus On

Addressing growth barriers requires a substantial amount of delegation, but Jim Alampi says that are four fundamental things that cannot be delegated by a CEO:

  1. Setting the company’s direction
  2. Making sure the right people are in place and that these employees are being developed
  3. Ensuring that employees have the resources that they need
  4. Removing obstacles from employees

“Anything I let take me away from those four things means that nobody’s doing those four things,” Jim said.

The Value of Vistage Speakers

As the former president of a $1.5 billion company and the CEO of a $300M public corporation, Jim knows what it takes to take a successful business to the next level of growth.

Jim Alampi is just one of many influential business development experts who speak to my Vistage CEO groups. All Vistage resource speakers are leading business experts who have valuable insights on business leadership and work-life balance.

Vistage speakers offer more than just run-of-the-mill business advice that you can get from a Ted Talk – our speakers work directly with Vistage members to provide actionable insights and tools to spur business growth.

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