Tips for managing business growth
Of course, you want your business to grow what business operator doesn’t want growth!
Unchecked growth, however, can actually be detrimental to an emerging business.
Unmanaged growth could potentially lead to poorly designed systems and processes, divergence into non-core business activities and cost inefficiencies.
With that in mind, here are five of the key factors every small business should undertake to help manage their growth for long-term sustainability:
1. Set business goals
Setting goals for the business is a simple way of targeting your operations.
1. What is the core aim of the business?
2. What milestones do you hope to achieve and by when?
3. How will you achieve these milestones?
4. Establishing these goals early on as part of your business strategy will keep your efforts concentrated on your core business.
2. Empower your employees
Your staff are your greatest asset, particularly during the start-up and initial growth phases. As such, investing in them can benefit your bottom line.
Consider investing in staff training programs to help them upskill and incentivise them with bonuses, share options or other perks to boost productivity.
Also empower your employees to contribute to the direction of the company. Working at the coalface, they can provide you with unique feedback and ideas to streamline operations, strengthen client relationships and reduce cost inefficiencies.
3. Manage client relationships
Rapidly growing firms can easily overlook the needs of established customers. As the BCG Matrixdemonstrates, stars may be the ultimate customer type, but â€˜cash cows’ produce steady profit streams.
Be sure to maintain healthy relationships with existing customers, as repeat business will support your ongoing cash flow and these clients are better placed to recommend your services to their own partners and suppliers.
4. Contingency planning
Unfortunately, situations can arise suddenly which severely impact your business.
Short term shocks, such as losing an important customer or a key staff member unexpectedly leaving, can impact the day-to-day operations. Longer term impacts, such as technological changes or new competitors, can reduce demand for your products or services.
Knowing how you will respond to an adverse situation will enable you to act swiftly and decisively, minimising any detrimental impacts.
5. Financing growth
It’s great to secure new contracts or push new product offerings, but know from the outset how you intend to finance this growth.
Raising new capital, portioning profits for reinvestment, reallocating funds across business units,accessing government grants or tapping into new revenue streams are all options for funding growth.
Plan your funding needs in advance to ensure the optimal cost-benefit position is achieved.
The best kind of growth is sustainable growth, so take the reins when it comes to growing your business for the best possible chance of long term success.