How to Effectively Manage Fast Growth Without Losing Your Business
It's great news when your small business starts to take off, but that fast growth will need focused management to succeed.
Swift growth, especially when experienced for the first time can be both exciting and alarming at the same time, says Steve Alkandros, founder of New England Management Group, in a Forbes Business Council post.
If your business is growing fast or on that path, here's a look at a few ideas to prepare and effectively handle the influx of customers.
Identify Operational Inefficiencies
A great way to begin scaling your operations is to identify and rectify operational inefficiencies.
Considerable growth, if not addressed quickly, can augment those problems and lead to monumental failure, Alkandros adds in the Forbes post.
Hire More Staff, Selectively
Adding staff to cover the increased business is important, as is making the right hires for your expanding team.
Ensuring that you hire the most suitable people is a smart way to secure quick growth, says Christian Lanng, CEO and co-founder of business software provider Tradeshift, in a Business News Daily story by Sean Peek.
It can be overwhelming to scale quickly, Flashman advises in the Forbes Business Council blog, cautioning against rash hiring. Instead, he says, take additional time to create a team that will help you continue to grow.
He recommends that small business owners hire those who excel in areas that they don't, while trusting the people they've hired to perform their duties without micromanaging.
Crunch The Numbers
If you're in a rapid growth stage, the increased sales may very well mean higher profits. However, experts in business finance say that's not necessarily true. There could be circumstances when profit margins are decreased when your business grows.
So it's important to crunch the numbers to get a clear picture of your working capital needs.
"Before you start spending money hiring new people or investing in a bigger office space, take a minute to understand your finances beyond just the top-line revenue number," says a blog by accounting software company Freshbooks.
The blog adds that examining current sales, overhead, inventory, assets , liabilities and operating costs will go a long way in understanding the overall health of the business.
There has never been a better time to understand the need to delegate.
"In a fast-growing company, this realization means you need to take urgent action. If you try to control everything, you're just holding your company back from success," advises Nellie Akalp, CEO of CorpNet.com.
In a blog for Entrepreneur, Akalp shared what she learned during the rapid growth of her business.
She writes that they amended their management stucture and create additional leadership positions to take on a more startegic role, zeroing on areas including perfecting their back-end CRM.
"If you've hired new staff, consider establishing support systems and mentoring opportunities for employees."