Authored by Phil Cohen
While some companies are satisfied with occupying a small niche in their market, many small businesses are geared toward future growth. When rapid growth occurs, however, far too many small business owners flounder because their preparations did not match their goals.
Is your company poised to run with new growth, or to be trampled by it? By focusing on the three areas below, you can be ready for growth spurts as they occur.
The Three Pillars of Business Growth
(The) Organization
What does growth look like for your company, and have you discussed how it will impact the way you do things now? To minimize growing pains, create an organizational structure that can flex to meet your changing needs and keep everyone on the same page about who does what. Have a clearly defined chain of command so you can delegate new responsibilities with confidence.
At the same time, develop your employees’ sense of investment in the company. Encourage collaboration and teamwork to implement new practices, and share company knowledge so everyone is on the same page. Empower your employees to champion their areas of focus and to make changes as necessary to ensure smooth growth. If you are expanding your staff to manage growth, integrate them with your existing team as quickly and completely as possible to maintain your momentum.
Quality
The quality of your product or service should not suffer as a result of rapid growth. Establish or refine your quality control process and divide the responsibilities between multiple employees. Reevaluate your system regularly and work to identify ways to make it even better. More importantly, when there is a problem it is critical to act quickly to solve it.
One practice that will ease client frustrations during periods of growth (and reduce your time fielding angry phone calls) is to manage client expectations at the front end of a transition period. Clients do not need to know everything about your business growth but will appreciate forewarning about potential delays and other changes that may impact their service from you. Don’t forget to include how these changes will benefit your clients in the long run!
Cash
In the end, everything boils down to money. Do you have enough? How much more will you make? Can your bank account weather the added expenses that accompany a rapid growth period?
Even “rapid” growth does not typically occur overnight. When you notice the signs of change or actively decide to expand, go over your current cash flow and calculate how much more cash you will need on hand. This is a great time to critically evaluate your expenses and trim those that don’t provide as much benefit to your company.
Ideally, you should have between 3 and 6 months’ worth of cash in reserve to supplement your budget while waiting for new customers to pay. You have a few options to build up your cash reserves, such as offering incentives to customers who pay their invoices immediately or who pay by check rather than credit card (saving you in processing fees). Whatever you do, do not divert cash from existing expenses to cover new ones!
One such option is financing your growth. Small business factoring programs allow business owners to access the cash they need to finance expansion and maintain a safety net without creating unnecessary debt or succumbing to exorbitant fees. Moreover, the factoring relationship provides additional benefits to help you further cut costs and put your cash to the best use.
Factor Finders helps small businesses in every industry find the perfect small business factoring plan to meet their goals. Contact Factor Finders today to learn about factoring for your small business and to receive a risk-free quote.