Mar 13, 2020
When your business starts to thrive, sales go up and revenue skyrockets. It would appear like that elusive greener pasture that you have been craving is coming to actualization. This is called the rapid growth stage in entrepreneurship and is considered the most exciting time in the life of a company.
However, managing this stage is not an easy task. If you are not well equipped for the impending big changes, things can easily get out of control, with all your dreams turning into a nightmare. Certainly, the challenges inherent in rapid growth are real, and thus, each and every one of them needs to be handled with utmost care. Below are top tips to arm yourself with for such nerve-racking times.
Decipher the cause of growth
If your business is experiencing rapid growth, it’s clear you are doing something right. Likely, you have already deciphered exactly what distinguishes you from the competition. This aspect should be kept prominent in your company’s business model as losing sight of essential values during rapid growth can be easier than you might think.
This entails analyzing sales, overheads, assets, receivables, and inventory; which all offer a clearer notion of your exact financial standing. Armed with this vital information, you will be in a better position to make plans to better estimate growth and decide on your refinancing needs. This way, potential liquidation will be avoided in the long run.
Predict your company’s cash requirement
By this, we mean that your inflows and outflows should be properly analyzed. This foreknowledge will help with determining cash requirements for the future. With this, you will also be able to assess if improvements are possible just by scrutinizing the present financial standing. you can then decide to restructure existing debt exposure, access extra financing, or convert assets that are not in use into cash.
Vigilant planning is a great way to control costs; so, it’s best to consider a meticulous streamlining structure that will address overhead costs like equipment procurement, rental fee, office supplies, and human resources. Concrete goals should also be set to cut costs, along with accountable staff that can properly handle the job.
Additionally, your costs can also be reduced by leveraging employee buy-in. Most importantly, you should be specifically careful about cost maintenance control while your company is experiencing growth spurts where most organizations often overindulge with expenses.
Both long term and short term goals must come to play whenever you are faced with hard decisions about the best place to invest in the business. Companies that are expanding are prone to liquidity challenges; thus, every single investment needs to have a good purpose. For instance, manufacturing companies that are still in the process of growth have to invest more in material and equipment – this is targeted at producing more products and hastening expansion. At some point, you will probably have to seek loan facilities to aid with scaling.
Don’t be too far from your customers
Customer feedback is vital, and your business must find a good way of capturing it. This can be achieved through monitoring comments made on social media, customer surveys, and encouraging personal phone calls or emails when your clients need to get some questions answered; or perhaps, they might also have experiences to share with you. With this in place, you are more likely to receive helpful insight into what works and what doesn’t, as well as where improvement is needed. Also, if you have a website where you can engage these clients, then you should consider adding a chatbox.
Deduct deadweight clients
Trying to meet the needs of clients, is no doubt, the quickest way your growing business can be overextended. Often in a bid to expand your horizons, it’s best to continue building on making existing customers happy. What this entails is creating only the best goods and services whilst managing loyal clientele. This way, you can then purge both the worst products/services, as well as the least responsive customers.
While you might view your growing company eliminating deadweight customers as counterintuitive, the capacity to maintain good quality in services and products will be increased. Any challenges can be easily alleviated by concentrating on the products/services as well as the clients that are central to the business. So, if your business is experiencing rapid growth, you will now be in a better position to determine the best selling products and clientele segment that is driving the best value.
Outsource and delegate work
With business growth, time will become limited, unlike your earlier days when you had sufficient time. This is because additional activities have taken up your precious free time. At this stage, it will be completely unrealistic to believe that you can still do everything on your own. No doubt, being successful in big business entails coming to terms with delegating work. So, this means you will have to decipher the tasks that time will not permit you to undertake and assign them to a capable hand.
You can also consider outsourcing work, as you need a plethora of skills to run a business successfully. So, when the day dawns that you and your staff are no longer capable of undertaking everything, you will have to consider leveraging professional services offered by other companies. Different jobs like marketing, IT support, accounting, and more can be outsourced.
Communicate with staff
As your organization experiences rapid growth, there will certainly be changes in policies and procedures. It is now your responsibility to make sure that employees are briefed on such changes and adjustments ahead of time. This way, they will be better equipped to roll with the punches.
Inform them that the business is going through a phase of rapid growth and that feedback will go a long way towards easing the transition process. Furthermore, including information on how the growth will benefit employees might serve as a catalyst for achieving great results.
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