When buying or starting a business, we all hope for and dream about the time when our venture is expanding rapidly, and we have so much growth that we have to hire more people and see profits pouring in.
However, too-quick growth can cause many teething problems, often leading organizations to shut down, sell, or close some parts of the venture.
As such, it’s vital to be strategic about how you handle times of rapid increases in customer sales. Here are some steps to take.
Keep a Close Eye on Cashflow
For starters, it’s vital to keep a close eye on cashflow. Many people erroneously think that when a business is growing rapidly, plenty of cash is coming in, so it’s not so essential to watch the reserves. However, while there may be plenty of incoming funds, there will also be more outgoings than before, whether in the cost of stock to sell, staff to man stores or complete services, bigger premises to pay for, and so on.
Many businesses have to suddenly close or get sold these days because the owners or managers have found themselves having a big issue with cashflow and unable to pay wages and other bills. As such, you need to avoid this situation, even when times are good and you might think it’s the last thing you have to worry about.
Get a Loan if Needed
To grow your business how you’d like, you may have to get access to additional funds. For instance, you might need to hire a bunch of new people all at once to service the extra demand you have suddenly, or invest in larger production facilities or more expensive equipment, or even buy a lot of inventory upfront ASAP to cater to the growth in demand.
When this happens, you may want to get a loan to help tide your business over until the funds from sales come in. Ensure you source a decent small business loan from a reputable lender who offers reasonable interest rates and terms and conditions. Don’t leave it until the last minute to source funds, as submitting applications and then waiting to see if they’re approved or denied can take a while.
You’ll need all your paperwork sorted out to apply for a loan, such as business tax returns, profit and loss and balance statements, lists of assets and liabilities, a business plan, and more. Be sure to research various lenders to find the best options for your needs, and consider going beyond just the big banks. Today, many alternative lenders are worth checking out, including those who operate online only or who cater specifically to clients in specific industries.
Plan Ahead as Much as Possible
When you have to handle rapid business growth, it’s normal to constantly “chase your tail” and feel like each day is just about solving one problem after another. However, for best results, it’s wise to try and plan ahead as much as you can. Work out your best moves in advance so you’re making decisions with some thought behind them rather than just on the fly.
It’s particularly beneficial to put some plans in place regarding marketing and sales strategies, human resource needs, and finances. Also, try to think monthly, quarterly, annually, and every two, three, and five years ahead so you know where you’re trying to go and why. Know your goals for the business and why you want to achieve them to be less distracted by interesting but not ideal opportunities along the way.
Ensure You Have the Right Team to Help You
You might have been doing most tasks yourself in your business until now, but if you’re getting a lot of growth in your venture, this won’t be able to continue. You will need to surround yourself with good people to help you handle the extra business and keep growing in the future.
As such, it’s time to start delegating work to employees or outsourcing tasks to qualified contractors. Focus on handling the things that only you can do and be willing to get the other jobs done by those you can easily pay for their time or train to do things the way you want them done.
Plus, you’ll want a solid team around you of advisors, mentors, and consultants, such as business coaches, accountants, financial advisors, solicitors, and the like. Utilize the expertise of these people to help you spot problems before they become major issues and cover yourself and your organization against potential future threats or at least chances of missing great opportunities. You may also want to bring some investors or a partner on board, depending on your goals and where you have gaps in knowledge and skills.
Other ways to handle rapid business growth are by setting up processes to streamline activities, spending plenty of time on customer service, and taking breaks to avoid burnout.
Fast growth is a double-edged sword, so be sure to be smart about how you deal with it over the coming months.