The following are the National Federation of Independent Business (NFIB)'s five traps that "routinely derail growth in large companies" and how small-business owners can learn how to overcome the new challenges that often come with growing their small business.

Trap 1. Losing touch with customers
Make the customers the No. 1 priority.

"As a small business, you can't compete on price," said Joe Fulmer, who runs the Stitching Post, a family business that has 115 employees and brings in $11.5 million in revenue annually. "But you can give your customers what the 'marts' can't — service."

Fulmer also strongly recommends constantly getting customer feedback.

Trap 2. Employing a staff that doesn't care
Keep employees on top of their game. A good attitude and the ability to juggle multiple tasks are often better than experience on a résumé. "The constant struggle is to not let your employees get stagnant," said Dion DeLoof, owner of staffing firm Anteo Group.

Spirits should be kept high around the office by trusting and empowering his employees. "We check our egos at the door," DeLoof says. "Even though my business card says 'President,' we don't live and die by titles. We've also tried to develop an environment where people are comfortable making mistakes. Then, you get a self-motivated workforce."

Trap 3. Forgetting your focus
Being a jack-of-all-trades doesn't always work. So don't forget about those targets to whom you are servicing.

Identify your strengths and what you enjoy doing. Be in business for your clients and for what they want. Manage growth by staying focused, energized and in control. For everything else, use partners.

Trap 4. Abandoning your creativity
"You have to balance the tried-and-true with a heavy dose of leaping off the ledge, as many times as not," said Kim Jordan, owner of New Belgium Brewing Company. "And that's a challenge, because people naturally resist."

Because Jordan finds creativity and innovation intellectually more intriguing than "doing just whatever," she involves her whole company in strategy development each year, which she claims helps keep involvement and innovation alive.

Trap 5. Allowing internal turf battles
When a company is growing fast and each department is focused on meeting its individual needs, there is a tendency to become compartmentalized. When everyone is working in their silos and not communicating between the silos, you run into problems.

So make sure department heads aren't putting their own interests before those of the company. Employees should have a clear enough picture of the business' best interests.

To combat turf battles, make sure all of employees understand the companywide goals, and give employees — from the top to the bottom — a stake in the outcome, whether the stake is short-term or long-term incentives (e.g., cash-based compensation or company equity).

"They can see the value of their stock marching up, which gets people thinking about the long-term repercussions of the decisions they make."

When Is a Small Business Not So Small?
According to a recent opinion piece in the Miami Herald, a small business is not so small when it comes to SBA rules and practices that "allow Fortune 500 firms to compete for federal contracts as a small business. Such SBA policies run counter to its mission to promote the interests of the small firms that employ half the civilian workforce and produce half of the private-sector's goods and services."

The SBA currently employs practices that allow companies to win contracts after they have outgrown the designation. As such, many start-ups significantly lose out. To wit, a Miami Herald review of more than 28,000 federal contracting documents for 2004 uncovered practices that "give ample reason for concern," one of which is as follows:

• More than half of Florida's top 20 small-business contractors had more than 500 employees. Four of the firms had more than 1,000 employees.

Last year the SBA held nationwide hearings on how it defines a small business. The organization received 6,000 additional responses; many came from small firms complaining about being forced to compete against giants. The SBA expects to propose new rules this year.

References

When Small Business Gets Big
by Lena Basha
National Federation of Independent Business, Sept. 27, 2005

Business competition on an uneven field
The Miami Herald, Jan. 09, 2006