These SME’s are too small to hire in the necessary dedicated individual expertise and thus the founder has to be the jack of all trades, juggling the various priorities requiring attention and usually (but not always ) without any real focus on the longer term implications of the decisions being made.
This Circus syndrome is simply part of the natural lifecycle of any SME business model but needs to be addressed as quickly as possible to enable the business to move on and mature otherwise it will ultimately strangle the business as the juggling act becomes impossible to maintain and forced decision making will lead to bad decisions being made and contribute to the demise of the business.
So the question is how to move through this phase of the business cycle as quickly and as positively as possible coupled with an eye to supporting a future vision of establishing a mature business model based on growth and increasing shareholder wealth.
There are numerous scenarios and answers to this question each with its individual positive and negative upsides. However the one holistic program that provides not only an immediate resolution to the Circus syndrome problem but also sets the business up for future growth is the introduction of a cornerstone shareholder.
Cornerstone shareholders come in various guises from simply providing a capital injection to the more mature model of not only providing the necessary funding but also providing as part of the package involved management expertise. It’s this latter model that is the answer to small SME’s Circus Syndrome problems. These types of cornerstone investors not only bring an immediate capital injection but also promise of future funding to grow the business.
More importantly they bring committed and experienced management expertise which they apply to the SME’s everyday business activities, providing a support platform in decision making functions for the founding shareholder. In addition they will have numerous business contacts and associations which they will bring to the table and thus provide a catalyst for increased growth potential.
The upsides of this style of cornerstone shareholding are that;
- The founding shareholder retains total control of their business while receiving management support, input and advice.
- The business receives an immediate capital injection with the promise of more funding if required.
- The founding shareholders wealth curve should significantly improve.
- The business lifecycle affected by the Circus syndrome can be quickly passed through and the business can reach a mature stage without too much fall out.
- A defined pathway to implementing a growth strategy can be introduced and implemented with complete confidence.
Naturally, identifying and finding this type and style of cornerstone shareholder requires a certain amount of preparatory work by the founding shareholder but there are plenty of experts with experience in this discipline who can provide the necessary assistance.
The real answer to the Circus syndrome is for the founding shareholder to be brave, stop the juggling act and step up and be the ring master with the confidence that the cornerstone shareholder will provide the necessary and required support to ensuring the supporting circus cast performs to the ring master’s satisfaction.
"...thus the founder has to be the jack of all trades, juggling the various priorities requiring attention and usually without any real focus on the longer term implications of the decisions being made."