Edward Hess is a professor of business administration at the University of Virginia and author of “Growing an Entrepreneurial Business: Concepts & Cases.” I interviewed Hess about creating a new business and the most common challenges that face entrepreneurs.
What is the No. 1 challenge of growing an entrepreneurial business?
Growth is change; growth requires an entrepreneur to change. Growth requires more processes, controls and people. Changing so many aspects of the business simultaneously while maintaining quality and positive cash flow is the big challenge.
In your book, you mention the importance of not being a “firefighter” who spends all his time fixing things such as employee conflicts and inventory orders. When it’s time to go into planning mode, who should take care of these tasks?
The entrepreneur needs to set aside “firehouse” time to plan, prioritize and to think strategically. This can be done during off hours or at work if the entrepreneur has properly trained a manager(s).
What is the most important thing to remember when transitioning from a doer to a manager?
Teach, not punish, and put in processes for people to follow. And accept the fact that no one will do the job the exactly way you would do it.
In your book, you mention that upgrading is a process that never ends. What are some effective strategies to keep in mind as a company grows and transitions?
Do not become complacent or take people, controls and processes for granted. Use the Growth Risks Audit in my book to reassess the risks of growth at least every six months when you are growing quickly.