Small Business Tips
Remember the early days when your friends and family discouraged you from starting your own business? They fed you all the statistics about new businesses failing every year and warned you against investing all your money.
Now the naysayers are eating their words as you head into your most successful quarter yet. You’ve grown faster than you ever expected.Rapid growth seems like a good problem to have, but things can topple quickly if you’re not prepared for it. Knowing how to manage business growth is the smartest way to keep that growth a regular expectation. We’ve prepared some strategies to help you meet that growth head-on.
Growth usually means new contracts with bigger clients, and these accounts may demand more attention than you have to give. Don’t neglect the clients that got you here. Check in with your existing customers to make sure they’re getting the same high-level service. Orders need to be complete and on time. The quality of the product needs to stay on track. Consistent communication keeps the client open-minded to new products.
If you don’t have time to tend to your existing clients, make sure someone on your payroll does. Appoint designated staff members to keep old business while you secure new opportunities.
Your first instinct in times of growth is probably to bring on more staff to meet demands. Before you post a dozen new job listings online, slow down and take a look at what you’ve already got. Employees that were doing one thing before may be able to add new responsibilities without drastically increasing their hours. The cost of recruiting candidates and the time involved in training new hires can result in unnecessary costs.
Hiring new staff is also a big commitment. The last thing you want to do is have to lay people off down the road. Consider using temporary employees or independent contractors to supplement your workforce. This allows you to manage labour as growth fluctuates.
It may feel like your business just exploded overnight, but usually, there are reasons. Did you just do a spot on TV? Were you featured in a magazine? Maybe you came out with a new product that’s spreading like wildfire. When you’ve got purchase orders coming in left and right, find out why. Knowing what works helps you strategize to build on that growth.
For example, say you had a product that was doing just okay. Then you came out with a new product that’s outselling its predecessor by the truckload. This knowledge tells you what your customers really want. Now you can invest in improving your superstar product or developing new products that meet similar needs.
If there was ever a time to know your numbers, this is it. Whether money is coming in or going out, you should know what each dollar of your business is doing. Invest in software that will help you track your finances and stay organized to prevent calculating errors. Take advantage of high-ranking employees that are good with numbers, especially if you consider yourself mathematically challenged.
Keep up with what you owe vendors or negotiate terms to adjust your balance due. On the opposite end, monitor clients who owe you money, so you know when these accounts are paid up. There’s no point in relying on income that hasn’t been come in yet.
Your working capital is what helps you fund those thrilling purchase orders. Unless you’ve got a warehouse of unsold product, you’re going to need money to manufacture in bulk to keep up. New contracts might leave you wealthy, but not until you deliver the product. Finding your pockets empty in these situations can stop growth from reaching its full potential.One way you can build a comfortable cushion is to secure a business loan that’s specifically designed for this purpose. If you play your cards right, you can work out a payment schedule that works with the cash you have coming in.
On top of funding these big orders, you may discover that the manufacturing process needs to be tweaked. You can usually cut down on the cost per unit by producing more at one time. You’ll have the choice to either pocket that savings or lower the purchase price to appeal to more customers.
Filling bulk orders on time could also force you to look into your current delivery system. Are there areas here where you could save money?
You started this business with a vision in mind. Don’t let unexpected growth erase that vision. Identify the key ideas that make your business what it is and prioritize them. When you consistently return to those ideas, your business with stay true to your original intentions.
