No business stays the same forever. The healthiest, most profitable and successful businesses are continually evolving. To achieve this requires a business owner to constantly evolve too; shifting mindset, strategy, and priorities to deliver what the business needs. When there’s a gap between the leadership required by the business and its owner’s expectations and willingness to deliver, business performance may start to suffer. This is a sign that the business may have outgrown its owner.
People evolve in a similar way to organisations. Our hopes, plans and priorities change as we get older. Factors that were once huge motivators may no longer apply. For example, you may have established your business to provide for your family and secure their future. Once your children are adults with their own families, does the same motivation still apply?
From a business sale perspective, a company that’s stagnating in terms of performance and profitability can lose market value. That’s why recognising the signs that your business has outgrown you early, is crucial.
Recognise the signs to avoid business performance issues
Self-reflection is an important skill every business leader needs to have. The ability to stop, reflect, and evaluate current circumstances to inform decision-making is invaluable. It should be part of your regular practice.
Identifying issues affecting your energy and enthusiasm for the business early, can help a business avoid:
- Stagnating growth,
- Declining business performance,
- Missing important details, e.g. legal compliance
- People issues, e.g. declining productivity, motivation and engagement.
5 clear signs your business has outgrown you
When we talk about reasons to sell a business, we use the terms ‘Push’ and ‘Pull’ factors. The five signs outlined below are push factors, i.e. reasons that are pushing you away from your business.
- Your lack of decision-making is slowing things down: An inability to make decisions is an indicator that you have too much responsibility within the business. When colleagues are waiting on one person for answers, that person becomes a roadblock, which can lead to your team feeling resentful . You need to ask yourself, why this is happening. It could be one of several reasons:
- A lack of trust in your team
- You’re unable to delegate for fear of losing control
- You’re trapped in a small business or a business manager mindset
- Perhaps deep down inside you don’t want to see progress because you like your business just the way it is.
- Your skills no longer match the challenges ahead: A business has to evolve at the same pace as the market it operates in, otherwise it will get left behind. To survive in the current climate, organisations have to adapt to, and embrace changes. Artificial Intelligence and emerging technologies is one example. If you don’t keep up with the pace of change, your business could grow out of touch with customer needs and expectations.
If you prefer to be a generalist, not a specialist, and aren’t interested in up-skilling, it could be time for someone else to take your place. Sticking around will only hold your business back.
- Growth has plateaued, but you can’t put your finger on why: In the early days your business grew quickly to keep up with demand. No two days were the same. It was an exciting and challenging time to be a business owner, watching turnover increase rapidly. Recent results have not been so great. Financial performance has stagnated and your customer base isn’t growing. If you can’t pinpoint the reason or you lack the enthusiasm to understand why this is happening, maybe it’s time to give way to a new owner.
Starting and growing a successful business is a bit like training to run a marathon. You’ve put the work in and completed the course in your target time. But what comes next? Can you summon up the energy to start over again or are your marathon days over?
- Your business feels like a burden instead of an achievement: That buzz you felt on launching your business has long gone. The prospect of heading to work no longer gives you the thrill it used to. Plenty of entrepreneurs enjoy the early phase of starting up a business – it’s exciting, thrilling and rewarding. But when that buzz has faded and day-to-day operations feel like they are holding you back, motivation can begin to wane.
- You’re fighting to maintain control and struggling to keep the business aligned to your personal goals. Is your business growing too fast for you? When operations grow rapidly it can feel overwhelming, especially if managing a small business was all you ever wanted to achieve. Maybe the business isn’t delivering the growth you expect or desire. Whatever is driving this struggle for control, when you no longer feel a sense of purpose or accomplishment from your work, it is sensible to think about planning your exit strategy.
When your mind drifts to other possibilities
It’s natural for our priorities to change. Life would be quite boring if we did the same thing every day for our entire career. Thinking about what else you could be doing away from your business (those pull factors) is nothing to feel guilty about. But when it happens, it’s definitely the right time to consider what’s next. Don’t let it get to the stage where you resent your business, as that’s when business performance and value starts to suffer. Remember, you’re not abandoning your business, you are simply starting a new chapter.
Is new leadership best for your business?
You still care for your business and want it to succeed into the future, but you’ve realised that this will need to happen without you at the helm. If one or more of the factors we’ve outlined is driving you to consider selling, your business has outgrown you. Talking to an exit consultant is a logical next step. Book a discovery call to find out how we can support with business valuation, exit planning, and professional advice.
