The Top Nine Challenges of Growing a Business and How to Tackle Them - Slide 10

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The people, processes, structure, and controls needed to manage a business with $1 million of revenue generally do not work for a business with $10 million of revenue.

“Entrepreneurs often learn the hard way that growth means continual change,” says Hess. “And as you grow, the solutions that worked at one level will most likely not work at the next. Inflection points for the companies I’ve studied occurred frequently when they expanded to 10, 25, 50, and 100 employees. When these changes take place, entrepreneurs often realize their hope of having a smooth-running machine is an elusive dream.”

“Successful entrepreneurs and their employees are open to learning and adapting in an incremental, iterative, and experimental fashion. The hard truth is that growing businesses generally do not experience much sameness or predictability until they become quite large — for example, larger than $100 million in revenue — but learn to manage these changes properly, and you can keep the ship pointed in the right direction.”

For many, achieving the American Dream means taking control of their destiny, quitting their nine to five, and opening the doors of their very own business. These brave entrepreneurial souls have shaped American enterprise, and today, they’re playing the very important role of helping drive the nation’s economic recovery. If you’re one of these brave souls — pouring your blood, sweat and tears into running your own business — Edward D. Hess, professor at the University of Virginia’s Darden Graduate School of Business, stresses that there’s no time for rest. Once you’ve got your start-up off the ground, he says, the daunting task of growing your business to the next level must begin.

“Growing a business presents a whole new group of challenges for entrepreneurs,” says Hess, author of the new book Growing an Entrepreneurial Business: Concepts & Cases (Stanford University Press, 2011, ISBN: 978-0-8047714-1-2). “The good news is that most businesses experience the same or very similar challenges when it comes to growth. There is no need for any entrepreneur to reinvent the ‘growth wheel.’ You just have to be willing to learn from those who grew before you.”

With his own research and new book, Hess aims to make the growth process even easier to navigate for the nation’s brave entrepreneurs. He recently studied 54 high-growth entrepreneurial companies based in 23 different states, all of which were designated as successful growth companies by leading magazines or accounting firms.

“What I found was that these successful companies all faced very similar challenges when it came to growing,” says Hess. “But what sets them apart from those companies that didn’t survive or didn’t reach the same level of success is how they approached that growth.  The companies in my study understood that growth is change and change is risky. Entrepreneurs who understand this and the challenges that come with it are the ones with the best chances for successful growth.”

This slideshow features the top nine growth challenges facing today’s entrepreneurs.

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