6 signs your small business is no longer small
Companies with annual revenue between $50 million and $1 billion are typically known as the U.S. middle market. But revenue alone doesn’t determine inclusion. There are also operational, strategic, and leadership challenges unique to this segment.
When you’re small, it may make sense to install your organized and math-savvy daughter as data-entry clerk, bookkeeper, and human resources manager. But as your company increases sales, adds employees, or expands its geographic footprint, you may find the need for more sophisticated professionals to handle the complex legal, human resources, finance, and accounting problems a family member may not be equipped to handle. This is especially true if your company goes from private to public.2. Difficulty in managing your workforce
If you feel overwhelmed by the logistics of people management, this may be another clue. While you may have successfully managed 100 employees in a single location, you may struggle to manage twice as many employees across multiple buildings or cities. Just scheduling a meeting can be a vexing task as face-to-face communication is replaced by telephone calls, emails, and texting.3. Fluctuation in operational excellence
Maintaining the quality of your company’s products and services not only helps to satisfy and retain customers, but it also helps build a company’s reputation and ratings. That’s good for everyone’s bottom line. But, as your company grows, rather than consistently executing your company strategy (or getting managers to do so), you’re like a seagull swooping in occasionally to drop advice. Your decreased presence may make it difficult to notice when quality or services are slipping, so you may find yourself replacing trust and personal observation with inspections, audits, and establishing metrics to measure and maintain quality and service standards.4. Struggle to find and retain top talent
Top candidates today are looking for companies that offer more than an attractive salary. As part of a suite of perks and benefits, potential executives often expect meaningful work opportunities, work/life balance, strong corporate culture, and high-caliber associates in an environment with ample paths to promotion and growth.5. Financial backers become impatient
As a small business, you’re likely nimble, adapting easily and quickly to customer needs and demands. However, as you get larger (especially if you are backed by private equity or have gone public), you may find investors and shareholders have less patience and/or less appetite for risk. Instead, visionary leadership and innovation often needs to be complemented with tight management processes and a focus on efficiency and cost cutting.6. Company becomes a target
When you’re a small business, you often may fly under the radar, largely ignored by powerful national and international corporations. However, as you head towards mid-sized status, these same companies may notice your business and products and directly target your company for acquisition or compete with your company to put you out of business.
Growth may have its challenges, but it has its benefits, too, such as potential access to cheaper financing, the possibility to franchise your business, utilize corporate R&D, or possible tax incentives (NOTE: Consult your tax advisor for additional details). And these plusses may help power your company to even greater heights.