If you are running a small business or a startup, you are probably hoping for that moment when all the pieces fall into place and your company starts to grow unexpectedly. Sudden business growth is not uncommon among SMEs and startups, which is probably why so many people decide to give it a shot. However, for most business owners, rapid business expansion often turns out to be the case of “careful what you wish for”. Why? Well, the thing is that it comes with a bunch of challenges, and not just perks, which you haven’t experienced before.
For instance, one in 12 businesses closes every year. However, the longer they are in business, the higher their chances are of surviving. Another discouraging fact is that as many as 82% of them fail due to cash flow problems. Apart from cash flow, lack of planning and expert advice, as well as failure to accept changes are also among the most common problems most small businesses face.
In order to avoid your company’s growth catching you off guard, let’s take a look at what you can do.
1. Make Sure Your Cash Flow Is Sufficient
This is one of the indicators that you are on your way toward success, but it can also be one of the first signs of failure, in case you don’t tackle your cash flow head-on. How does this happen anyway? Well, in order to expand your company and serve more customers, you need to start spending and investing more money so that you can earn more. But, if you find yourself collecting payments and invoices from back when your business was smaller, you will find that they amount to less than your current expenses.
The most obvious solution would be to create a reserve fund, but since you will always have to direct your funds somewhere else, it’s not a very likely option. Getting a loan is a more viable one, and despite popular belief, a majority of small business qualify for bank or SBA loans, especially those which are growing fast (see more details here).
2. Have a Goal
Having both short and long-term goals is crucial for any small business. The former allows you to act fast and solve your current problems so you can move on into the future. The latter represents an ideal version of your company years from now, which enables you to keep an eye on the bigger picture. However, the trickiest part happens in between the two, and it often includes planning for all the changes your business will experience in terms of finance, operation, resources, as well as your staff.
Keeping these medium-term goals in mind will help you prepare for any sudden changes, both positive and negative, that your business might experience.
3. Don’t Forget about Your Customers
The reason your small business is enjoying that unexpected growth spurt is that you were able to solve their problems and make them happy. But, if the number of your customers spikes all of a sudden, you will have to work much harder to keep all of them happy. Make sure that you are always listening to them, which can be done fairly easily through social media, and that your network of suppliers and distributors is able to handle the growth. In other words, your transition needs to be seamless for the customer. Only then can you expect them to remain loyal.
4. Make Sure Your Staff Is Happy
As a small business owner or manager, you are probably welcoming the expansion with open arms, and you should, but your employees might be looking at it from a different angle. For them, rapid growth means more responsibilities, a larger workload, and more stress. Of course, paying them more works like a charm, but if you are experiencing cash problems, you might not be able to compensate them right away. In the meantime, make sure that they are not overworked, and that you give public recognition for all their hard work.
Another option is to hire additional staff in order to make it easier for your existing employees. The same goes for providing them with the right tools and resources, so they can remain productive and satisfied. Once your cash flow problems are fixed, give them their well-earned bonus or a raise, if you want to keep them from leaving.
5. Focus on Leadership and Team Collaboration
As a manager, you will be expected to make all the tough decision regarding the company. However, that doesn’t mean that you should micromanage everything. If you think your employees are capable enough, provide them with additional responsibilities. You should also be flexible and open to their ideas and vice versa. Once your employees become more comfortable with their new responsibilities, they will also become your biggest support system when it comes to new hires, since they will be able to take on a key role in providing training.
In short, having the right talent on all levels can make the ride less bumpy, especially in case of sudden growth.
While growth is something that you should definitely embrace, you have to be careful not to romanticize it either, because it can turn out to be a real minefield. Because of that, make sure that you have all your bases covered, and that you aren’t biting off more than you can chew.