If you are entering a growth phase in your business it’s usually because you’ve done something right and customers are interested in your product and / or service.
But at some point you will reach the limit of your business capacity, running out of human power, resources or operational capacity.
Growth is always tricky to manage and if not managed properly, it can get a business into big trouble.
Flaws in management systems and quality control not in sync with growth can lead to business failure.
To stop this from happening and to manage growth effectively, here are a few things to keep in mind…
Create a scalable management model
As your business enters a growth cycle, you need to ensure you have the systems and processes in place to achieve the growth.
This means putting in place a scalable management model and systems to manage quality control.
When you start off small, only employing a few people, management and quality control is easy.
But as you grow and the demand for your product / service increases, you need to be able to quickly delineate roles and responsibilities to meet the demand.
To do this, each position should be clearly defined, and the tasks and responsibilities of each position put in writing – even if there is no need to fill those shoes yet.
A growth-oriented organisational chart is a helpful tool to guide your company’s expansion.
You also need to ensure you have proper processes to ensure quality is maintained and customers are satisfied.
Putting in place formal quality control standards is crucial to ensure your business turns out the same level of quality whether you are in a slow period or a growth period.
Systems to manage quality control will look different for every business but need to ensure you deliver your final product / service to the highest standard.
Listen to your customers
If you’re unprepared, the drawbacks of rapid growth will quickly show themselves if you’re listening to your customers.
Customers are happy to let you know immediately if they’re not happy so look for the warning signs.
As part of your plan, ensure you have the operational capacity available to support not just the demand but back-end systems and administration processes.
Put in place a formal approach to listening to your customers and acting on their input. This could include things like feedback forms, surveys or customer care calls.
Keeping your customers happy is the sole purpose of a business if it has any hope of surviving. If you don’t have happy customers, you won’t have a business.
Don’t forget about your bottom line
When a business is in a growth phase it’s easy to think that the dollars in the bank are building up. But if you’re not watching your figures closely, your business will suffer.
Even though you might be bringing in more money than ever before, if you let your expenses exceed your revenue growth even a little bit, this will dramatically affect your bottom line.
Your numbers are the health of your business. Make sure you constantly analyse them closely to see where risks can be avoided and opportunities can be realised.
Make sure you set a budget for the growth phase and understand where your increased cash flow is coming from and going to. It’s also imperative you plan for increased employee costs as you hire more staff to cope with demand.
If in doubt, contact your MWM Advisory accountants. They can help you plan for the effective and successful growth of your business and guide you through your company’s growth phase.