Lessons Learned From the Challenges of Business Growth

Growth is great if that’s a goal for your company, but you’ll have to be prepared to adjust your small-business perspective accordingly

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Like almost all plumbing companies, our origin story is humble. That's how plumbers start businesses. One truck, home-based, the whole nine yards.

We started our company because we thought my dad could do it better — the oldest entrepreneur story in the book. Embracing the underdog mentality, we made this part of our brand identity. We were railing against the modern plumbing business model. We even use the tagline, "The plumbing company your grandfather would recognize."

Fast forward a few years — we have lots of employees and trucks, a huge office, acres of land, and revenue in the millions. By no means are we a multinational conglomerate. But small, scrappy mom and pop shop? Maybe not that either.

Even so, we still thought of ourselves as a very small business. A minority player that no one paid any attention to. I got jolted out of this illusion by a friendly competitor. In conversation, I referred to my business as a "small operation." He corrected me. Turns out, we had become one of the largest service plumbing operations in our area.

I don't say this to toot our horn. I say it because it was, to me, shocking, exciting, and terrifying. It also shone a light on a lot of insecurities and fears that I had been grappling with recently. A few days later, I was perusing the internet. Glancing through an article on entrepreneurship I read the following:

"I found my personal convictions being tested, as I encountered problems in the course of scaling a company." 

I felt that sentence in my bones. At the root, we have managed to keep our values intact. We have not betrayed our old-fashioned ways. But it hasn't been easy. To stay competitive in growth, we have had to make compromises.

I've also learned some lessons:

1. You have to let some customers go.

The customers who liked you because you were small won't stay with you. They want to deal with the owner (and only the owner) every time.

We have held on to many of our original customers. Those who love our company culture, good work, and competitive prices have stayed. Others we've had to let go.

They see higher prices — never mind that years have passed. They hear a different voice on the phone — never mind that the original voice is only a desk away. They experience new faces at their door — never mind that the quality remains the same. They call it a shame. We call it growth.

It's OK to let these people go. There are others who are now drawn to us because they see a reliable track record. They see flexible hours and fast response times. They see dozens of five-star reviews. New customers recognize our size as a sign of strength.

2. You have to let some employees go.

This is far more painful. The reality is that the employee who wants to work at the scrappy little company sometimes doesn't want to work for a big one. They don't want to be one of many. They want to feel special. They want to do things their way, not according to policy.

If you can promote them, you might make it work. If not, it's going to come to an end.

This won't be the case for every employee. We still have several who have been with us since the early days. But they haven't all lasted. I'll never stop being grateful. I'll never stop thinking about them or wishing them the best. But I am also confident that they did the right thing by moving on.

3. You have to be obsessive about profit.

Everything becomes magnified as you grow. When you have little overhead, profit comes easy. As you grow, overhead grows. The details matter more.

Expenses thrive in chaos. Revenue doesn't. If you want to keep expenses down and revenue up, you need systems, structure, and policy. You need rules that everyone follows every time. You need accountability. These things don't happen by accident.

You have to focus on profit as a constant goal because growing is expensive. Don't assume more revenue turns into more profit on its own. I’ve struggled with this because it can feel greedy. Obsessing over profit margin isn't a nice-gal thing to do. But if you want to stay competitive you must be able to afford things. That means there is something left over at the end of the day. It isn't about greed. It's about adding benefits, buying new equipment, and having cash to grow.

4. You have to accept that people need management.

There aren't two or three of you anymore. You can't keep track of everything in your head. You can't count on people working things out on their own. You can't casually mention something and expect it to happen. You can't expect everyone to be on the same page. People need management.

You'll hate it. It's hard. But people are the lifeblood of our business. The hardest part is that you can't blindly trust anymore. You have to create accountability. That creates layers of complexity that have to get managed. Employees, despite what they might think, want management. They thrive on structure and it's your job to create that.

5. You have to adapt your job description.

Everything has to scale. Marketing, data, accounting, regulatory. The bigger you get, the more complicated running your business becomes.

One day you'll realize that your company is too big to see from the top of a ladder. You have to have the ability to zoom out to a 500-foot view. That requires data. I call it managing from a spreadsheet.

You have to stay ahead of the curve. Slow days become more expensive. Mistakes come at a bigger cost. You'll find yourself figuring out how to track things. How to turn everything into a line on a report. How to quantify everything. Overall, the thing that changes the most is that more is on the line. You become painfully aware that there are children who eat or don't eat based on a paycheck you sign. It sounds dramatic but it is real. You have more to lose so you have to get and stay organized.

Being aware of where you are as a company is harder than it might seem. It's important to take stock on occasion. Make sure that you are still on the track for success.

About the Author

Anja Smith is managing partner for All Clear Plumbing in Greenville, South Carolina. She can be reached at anja@acpupstate.com.



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