You may think that rapid growth for your business is a good thing, but growing too fast sometimes causes unexpected challenges. There are many successful businesses that grew too fast, and experienced significant problems, and even failure. Of course, growth is the goal of a business; managing it well should be part of the plan. Here are four tips to manage business growth:
Hire the right people
As your business grows, it’s important to hire the right people. Mistakes in personnel decisions can present a significant obstacle to success. Jim Collins, author of Good to Great, says that growing a business has more to do with “who” than with “what.” Collins explains that those who grow their staff properly start by “getting the right people on the bus, the wrong people off the bus, and the right people in the right seats.” As your business expands, it’s important to maintain the attention to detail that propelled it to success, and this includes attending to the details necessary to make a good hire. Determine the functions and roles that need support, and create a job description. Before interviewing candidates, give thought to the skills and credentials most important for the role, and the most desirable traits for the person selected. For example, if an extrovert is needed on your team, be sure to look for that quality in your candidates; or if strong leadership and a sense of humor are desirable, look for those qualities during the interview. The best hires are those individuals who contribute to the culture as well as skillfully perform the functions of the job. Then, once you have your team, create the environment where each member can excel.
Determine if you want a scalable business
No matter what type of business you operate, it’s important to think about your long-term strategy to grow and scale. Not every successful business model is scalable. There are many businesses that operate profitably and bring satisfaction to their owner that never grow beyond a single location, service or product. But you may want to start a business that is scalable. This means that the business can grow revenue without adding significantly to overall costs, and can be operated, and produce revenue, without the continuous presence of its owner. Examples of companies with scalable models are software product developers that produce a single software product that can be sold to millions of people. As you develop your business plan and model, determine the importance of scalability to its success.
Practice sound financial principles
When it comes to small business finances, it’s best to establish sound habits and practices from the beginning. When you start out, it may be possible to track revenue and expenses manually with simple tools; but as it grows, it is wise to consult with a trusted accountant. Get advice on the best systems that are easy to manage, and make it a habit to stay on top of your finances. Bookkeeping and tax preparation should be integrated into operations, and not be an afterthought.
Know your options for financing, and how it can help your business
As demand increases for your products or services, your business may need to invest in expansion. Whether it is a new facility, an additional location, a piece of equipment, or perhaps a new hire, there are upfront costs. For many businesses this requires financing. At Crestmark, we specialize in providing lending solutions that help businesses manage growth. We customize financing to meet the unique needs of each client. Give us a call today to discuss the variety of lending options we offer.