How To Make Bigger Better
For four years after he started DrinkWorks, a company that makes custom drinking cups, Richard Humphrey was routinely logging 100-hour weeks. “I was concerned that if I wasn’t there every minute, the company would fall apart,” he says. Humphrey’s Newport Beach (Calif.) company thrived, winning Sea World and Circle K convenience stores as customers, but he deteriorated. “I lost a lot of weight, I got sick, I had an engagement break off,” Humphrey says. “I lost touch with people.”
Doing it all may be encoded in entrepreneurial DNA, but it’s hardly the best way to manage a growing company. Entrepreneurs risk burning out and taking down their businesses and their personal lives with them.
Even when an entrepreneur can physically withstand such a grueling lifestyle, it’s hardly ever necessary. After a close relative fell ill in 2002, Humphrey was forced to leave the business in the hands of his five employees. He was stunned by how well they handled things. “They stepped up to the plate, and it worked out,” he says. “After that, the whole company balanced out.”
Managing growth successfully comes down to getting the right help at the right time. At the outset, it’s important for entrepreneurs to develop relationships with professionals such as accountants and lawyers, then make sure the right hires come on when they’re most needed. As the company grows, it may be wise to explore partnering or outsourcing — or even stepping back from the helm of your company.
It’s important to keep an eye on the future, even if you’re working out of a spare bedroom. “Start out acting like a big company from the beginning,” advises Marty Schmidt, president of Solution Metrix, a small business consultancy in Boston. At a minimum, create professional accounting procedures and hire an accountant who specializes in small businesses. Even after DrinkWorks had contracts with big-name clients, Humphrey was using a bookkeeper at tax time and winging it the rest of the year. Drafts of contracts got sent to a friend who was an attorney for an informal overview. “I lost a lot of time and money trying to do things myself,” says Humphrey.
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