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Delegation in business growth

Simple Alliance, Kenya Limited

Apt business strategy for business growth

When dealing with business growth there are aspects that an entrepreneur will experience that were not common when dealing with a new business. There will be controls that are required in your expanded business which were not necessary in the start-up mode. Preparation is especially necessary and is supposed to be done carefully when breaking away from the do-it-yourself tradition that was easy to handle when you only had one unit. As you will need to measure the performance of each unit under your chain, it would be important that you put accounting and cash flow controls in place. Such reports ought to be done frequently and a weekly income statement will be vital in preventing small problems from growing into big ones that may be hard to manage. You may want to seek your accountant’s services in setting up the unit financial reporting.

Delegation of responsibility and authority

Delegation of both responsibility and authority is fact that each entrepreneur should be alive to when you embark on expanding your business. You will need to be keen on the skills on recruitment evaluation and training which will be necessary for the expanding business. The very first step you need to make through this journey is growing into a second store and once this has been done your business will now be considered a chain and will be on its way  to becoming a continually improving cookie-cutter operation. It is the first step that is considered the greatest leap in the exercise of business expansion.

Holding on to key roles effectively

Delegation of authority may not be an easy task for a starting entrepreneur but there are ways that one would do so without relinquishing the functions that you would like to keep to yourself. For example it would be important that you remain as the sole signatory to cheques and deciding on capital allocations but you would opt for delegation of employee training to the managers.

Employee motivation

Motivating the key employees in the organisation is an element that ensures successful business. As much as holding on to some of these responsibilities may look like demotivation, there ways that you would still work to ensure these key employees remain motivated. Recognising the good and exceptional work done by these employees and rewarding them for the same is a key motivational factor for your workforce. With recognition it plays an even greater role that bestowing an employee with an impressive title. In recognising your employees you should let it be clear that it is them the key people in positions of authority and are responsible for a lot in the business. Delegation ensures that when there are mistakes that will rear their heads in your business they will be contained in specific spheres of responsibility and through frequent financial reporting there will be minimal adverse financial impact of these mistakes by managers.

Motivation through incentives

Good managers are motivated by monetary incentive plans that are tied to their individual success. The incentive compensation of your management team should be therefore compartmentalized for each manager, so that a manager's bonus is based solely on what he or she has accomplished and not diluted by how other parts of the business are doing. For example, if you develop a chain of stores, each store manager's incentive compensation should be based only on the profit of his or her store.

Delegation of responsibility and authority as an aspect of expanding business is one that an entrepreneur needs to consider carefully while undertaking. While you may not be able to handle all the functions as it were when you had a single unit there are some crucial duties that you may want to keep to yourself, but even then you need to maintain your managers motivated through recognition and reward. You also need to put measures in place to monitor any mistakes by the managers that may have a negative financial impact on your business. It is also important to note that your successful competitors would be a great resource in finding out how to go about this.

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