If you have never been in a situation where your business is growing too quickly, you might be asking yourself why this post exists. After all, isn’t it the dream of every entrepreneur to grow a business quickly? In reality, growing too quickly can be as dangerous as not growing at all.
In an ideal world, your business would grow steadily; not to fast, not too slow. You would be able to accommodate new clients and orders and keep your existing clients satisfied. Unfortunately, as we all know, the ideal world doesn’t exist.
Very often, in cases where a business is growing too quickly, it is as a result of a major order which it cannot handle. However, since entrepreneurs are wired to be profitable, this major order is accepted. Then, the entrepreneur and the team will decide how to deal with it. More often than not, they fail. These tips should help thrive in this situation.
I am a strong believer that a team is a business’ most valuable resource. Richard Branson recommends, “Take care of your employees and they will take care of your business.” One of the best ways to take care of your team is to show them respect. If you’re working on a quote for a big order, let them in on it, ask for their input.
When staff members know about an upcoming project they can prepare for it. Planning ahead for the possibility of an order is much better than crisis management when the order suddenly appears. Be open and honest with your staff, addressing their concerns and inspiring them to accomplish this growth leap.
Your business is not only about you. Your staff work there for roughly 8 hours a day, so it is as much theirs as it is yours. If the majority of your staff feel that you shouldn’t take the order, it would be a good idea to consider why they are saying this. They might be saving your business.
One of the biggest challenges which a business which is growing too quickly will face is control. Whatever the size of the enterprise there are constant processes which are vital for the smooth running of the operations. Things like staff punching in/out, order tracking and follow up, chasing payments from clients are some examples.
When your business is booming you need to cater for the added number and volume of these processes. This would be a great time to check if you can tweak processes to make them more effective, or get rid of them completely. Together with your team, design a list of the main standard operating procedures for all staff to follow.
Then, once again, discuss these procedures with your staff, rather than simply imposing them. Explain why these SOPs will help improve work processes and, I cannot stress this enough, ask for their feedback. Tweak the processes again, if need be. Nothing is set in stone. Be also sure to select team members to ensure that processes are adhered to.
As your business is growing too quickly, one core group of people you tend to forget are your existing clients. You might assume that because you have served them well for many years that they will be patient as you deal with this new order. You would be very wrong to assume that.
I remember my Manager once taught me the phrase, “You are only as good as your last order.” Partly due to the rise of next day shipping and fast turnarounds, people expect things quickly. If you cannot satisfy their urgency then they will go elsewhere. That 1 big order may sustain your business for a while, but sooner or later you’re going to need your existing clients again.
Select members of your team who will handle existing customers as you work on your big project. Be honest with customers that due to a big order the business is busier than usual, but team member Joe will continue to cater to their needs. They may decide to pass orders to your competitors, but you will find that the majority would either delay orders, or if they do go to your competitors they will be back.
Boost your numbers.
No one can split themselves into two, although I know many entrepreneurs who wish they could. Simply because you receive a big order, your staff productivity isn’t going to double overnight. Sure, you could ask them to work overtime, but every person gets too tired at some point. Enter Outsourcing!
With the rise of the sharing economy, the number of professionals offering their services on the side has increased dramatically. This is excellent news for a company that is growing too quickly. You can increase the number of staff members, perhaps remotely, only until the project is completed.
Another, more traditional solution, is to hire temp workers. Specialised agencies can assist you, not only to find the right temporary staff but could also handle the employment registration and payroll for you. Although this comes at an extra cost, it will be worth it if it means a smooth operation even during these busy periods.
If you are a small business who gets paid on terms, cash flow is always a major headache. Unfortunately, with a major order, this problem only intensifies. You risk overstretching your finances to buy what you need from suppliers and then spend time and resources chasing the client for payment. About 90% of small businesses in the UK fail because of some sort of cash flow trouble.
You need to take important precautions for any orders, but especially for major ones which could bankrupt your business. On quote stage, calculate the projected cost and expenses which you will need to pay out to begin fulfilling the order. This is a good time to negotiate better terms with your suppliers.
The money you need to pay to begin your order should be covered by the deposit you request. If you don’t normally request a deposit, you will this time! Then, calculate another 2 to 4 payments; time them to receive them before you would need to make a payment to your suppliers and staff. Ideally, you would receive the last payment upon delivery, but it is understandable that you might need to offer better terms to your customer.