How to grow without dying?

Here is my dilemma. I have a company with a great reputation for specific dev work. This work is pretty much done by me, understood by me, and relies heavily on my skills and experience.

We do well, and are growing. I have a team of 3-4 people who are working with me now on projects, but the level of knowledge needed requires a whopping amount of experience. It's very specialized. And yet I find myself having less time to help in the actual day-to-day implementation of the work. Instead I am selling, talking with clients, doing contracts, invoices &c. And the work suffers. We become less and less responsive to our clients. The new guys are bright, but not really capable of solving the tough issues, or jumping from topic to topic to troubleshoot things.

I worry that this growth will make us a worse company. What to do? I do not want to be the bottleneck.

Congratulations! You seem to have an enviable position in a high-value business niche. :) You should to look deeply at yourself, and decide whether you're well suited to be a people manager or not. There are two high-level paths you can take:

• People manager -- you hire and train good people, and run the company.
• Lead tech -- you mainly code, and others run the company.

If you want to take the "lead tech" route:

• Hire a (possibly virtual) personal assistant ASAP, and offload as much lower-value-add work as you can.
• Invest in eliminating daily repetitive tasks, by automating as much of billing etc as possible.
• Ultimately, hire a CEO and take positions as lead tech and owner while making sure the CEO gets enough space.
• I personally find the book "The E-Myth Revisited" by Michal Gerber a bit ... obvious. But many other people find it gives them a much stronger perspective on how to build processes and systems in small businesses. Maybe give it a read.

If you want to take the "People manager" route:

• Hire a (possibly virtual) personal assistant ASAP...
• Invest heavily in training your best people.
• Invest in code frameworks that help with some of the common difficulties.
• Look at organization models, and give real consideration to the partnership model used by many law firms etc. Giving your best people limited co-ownership and profit sharing is a very important retention tool. Some case studies in software to look at are 37 Signals and Fog Creek.

I have done an extensive amount of research on emerging fast-growth firms and changing founder roles. As one would expect, founder roles will change as firms grow, especially as more employees are hired and the firm becomes more complex.

However, successful founders will develop their respective roles taking account of their firm's changing needs as well as their own skills, experience and work preferences (some will want to take on the leadership role (CEO) while others will be more comfortable with say a technical or sales role). There will be a lot of experimentation and learning on the job. Mistakes will be made but how one responses to those mistakes and what lessons are learnt is very important. Are employees allowed to make mistakes and what is your reaction when mistakes happen? To some extent you can also anticipate and plan for changes your firm will need to make as it grows (refer to 'organizational life cycles').

For a growing firm, it is critical that this learning as well as organizational processes are formalized and put into practice so that limited resources are not wasted on 'reinventing the wheel'. Also, if decision making is concentrated at the top bottlenecks will occur slowing the process and introducing inefficiencies. This is essentially the Gerber view. Make delegation work for you - but not all founders are capable and willing to delegate, and therefore their employees/managers are not allowed to develop team leader and management skills.

Co-founders with complementary attributes can provide a big competitive advantage as workloads and risks can be spread rather than concentrated on a single founder. You may therefore wish to consider bring in a business partner that can complement your skills, experience and work preferences. There are dangers in going down this track, but with the right business partner it can be very rewarding.

Instead I am selling, talking with clients, doing contracts, invoices &c

How many clients do you have? If the majority of time is spent selling to, and managing the accounts of your clients, then the first thing you should do is hire a 'sales & account manager'.

I personally wouldn't bother with a PA (they won't be able to handle sales & dealing with customers, and since there are only 5 people in your company you don't need an office admin). I also wouldn't bother looking for a CEO either until your firm is larger and there is a need for a full-time manager (otherwise the first thing your CEO will do is hire a sales guy and you end up paying for 2 people).