For those of us running a small business, growth is definitely a good thing. It is usually validation that we are doing a good job, and on track, and spurs us on to keep at it.
The issue comes when your growth, particularly fast growth, gets in the way of running your business the right way. There are specific challenges that are especially hard about running a rapidly growing enterprise. It is important to keep an eye out for some of the greatest challenges when managing a fast-growing business so that you can avoid them turning into traps that will stifle your success long-term. Here are 5 key watch-outs:
Not properly understanding your financials.
When your business is smaller, it is easier to be on top of the numbers. But when you are experiencing rapid growth, it is very hard to keep track of your financials in your head. That’s why it’s so important for business owners to get a fresh set of eyes to review the books regularly. As business consultants, we can quickly point out strengths or weaknesses of your business to help you better manage your business.
Thinking it is all about sales growth.
Increasing your top line will not always equate to more profit; another reason to look at your financial data beyond just the revenue line on your income statement and make decisions based on the trends across several metrics.
Hiring the wrong people.
Once a company is really growing quickly, the quality of the people you hire becomes a big issue. The culture of a company is very important, and this is typically what has made you successful. As you grow quickly, you need to keep your culture intact by hiring the right people.
Losing touch with the customer.
When you’re growing quickly, it’s really important to make sure your customers are happy. When sales are up, it’s easier to get sloppy with products and services. Even if you’re winning new customers, your old ones may be becoming dissatisfied. This leads to customer retention issues. The core elements of what makes a company successful usually are customers and products, so, even in times of growth, customer service has to be front of mind.
Allowing receivables to outrun sales growth.
The biggest challenge we see for fast-growth small business is that their accounts receivable run faster than their sales or their ability to collect. There sales are growing, but they’re selling on account rather through than cash transactions.
None of these are issues are related to the competence of the business owner. Rather, it is all about finding the right balance between growth and doing what they know they need to do to grow it the right way. Growth is only good if it is sustainable.
The Australian Business Business helps Brisbane and Gold Coast Small Businesses achieve better business results.
We are experts in assessing the health of a business and developing plans to safeguard its future. We find ways to ensure your business lives up to its potential, and that your true profit is maximised.
We know what it is like to be in small business. Our advice is practical, realistic, and affordable – we can guarantee a return on your “investment” when you act on our recommendations.
Contact us today to discuss how we could help your business achieve stronger results.