On growing a small business — Critical questions that should help you find clarity

July 17, 2011

When faced with an interesting problem, some consultants may start by offering advice — usually well seasoned advice.  That’s not my style.  I prefer to ask questions that define an agenda, that help the participants find their own insight and clarity.

So, when preparing to take part in a meeting of entrepreneurs who might be growing their solo business into a firm with two or more employees (perhaps many more than two!), I prepared the following twelve questions:

Note that I do offer some comments after each question, but these do not attempt to suggest what the answer should be.

1. What’s the core product or service, and how will it get refined / expanded /replaced as the company grows?

[If the plan is for you to do that yourself, think more about delegating.]

2. What are your key strengths, and, most important, your key weaknesses.

[The later should define your hiring priorities.]

3. What the company “brand“?

[And, if there isn’t one, how will it get established?  (Note that the brand is not just the product or service you offer, or a statement of its advantages.]

4. What’s compelling that sould attract somebody to work for this company? What might give them pause?

[No clarity? Think harder.]

5. Is your legal structure, intellectual property protection (patent, trademarks, etc.) all in good shape?

[If not, work with your lawyer. Gaps that may be tolerable in a solo venture can be much more dangerous in a larger organization.  Don’t have a lawyer yet?  Talk with one before trouble ensues!]

6. Which of all your roles do you really want to continue playing?

What new roles might you want?  What don’t you want to let go?  [Want to keep them all? That a recipe for disaster.]

7. Do you have clarity about how to set salaries? About possible employee ownership benefits?

[No? A good human resources (HR) consultant can be worth their weight in gold.]

8. Does all this talk about bringing in professionals like lawyers, HR consultants, etc. rub you the wrong way?

[Perhaps you should stay a solo business — and stay out of trouble.]

9. What risks will your company face? Does your initial success reflect on your excellence, or did you slide into a lucrative monopoly niche?

[Assuming that the market will stay wide open for you is a typical mistake — and a big one.]

10. How do you add value, visible value, to your customers?

[Don’t understand your value proposition, but just have a positive cash flow? Work on this.]

11. What are your core values and beliefs, and how would you state these for your growing organization?

[You will be tested — tugged to move across a fuzzy line into dangerous territory. Setting down clear values and beliefs in advance will help provide some anchor for these moments when drifting too far may be a real danger.]

12 What’s your exit strategy?

[You’ve not even hired your second employee, and I’m asking you this question! But it’s critical even at this early stage. Are you trying to maximize value, solve a critical social problem, create a disposable sandbox to play with some engaging technology? If you’re planning to sell the company, remember that it must have demonstrated value and stability that does not depend on your presence.]

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