Your business is blossoming; you’ve got a great team, sales are great and the market is fertile. You’re handling it all beautifully at the moment, but you’re beginning to feel stretched. Time for a business growth spurt!!!
Before making changes it’s important to realise that implementing and maintaining growth can present hurdles – some are predictable, some are not. Planning is the key.
Our Growth Guide will detail some of the problems you may encounter, and give some advice on keeping the surprises small:
1. Be on the ball
It is quite normal to analyse your business plan only on a yearly basis; forecasting performance, expenditure and income, reviewing and resetting targets. However if your business is growing rapidly, these annual reviews become insufficient as your business quickly outgrows them.
Therefore you must prepare to be flexible with your business planning at times of growth – and keep on top of income and expenditure figures as much as reasonably possible, as they will be changing all the time. Month-end accounts are a good time to review cash-flow. You need to be flexible and you may need to consider deviating massively from your original plans. Don’t worry about this – you’ve just got to do what needs to be done!
2. Keep an eye on cash-flow
Many businesses can fail at times of growth, simply because of simple cash-flow issues. If you have ever experienced business growth you will know how much money can be absorbed and how quickly. You may have great profits but may not reap the benefits of your sales before you’ve spent all of the money! Plan, plan, plan – go through your accounts before you spend. Make sure your accounts team are vigilant and communicate with you all the time. It is vital to have good debt-chasing systems in place too – read our countdown to smooth cash-flow for some great credit-control tips.
3. Manage your margins
It’s not all about sales figures – you must keep track of your net profit. Your profit margins need to be roomy enough to absorb an increase in expenses – especially if your business is financing the growth itself. If your margins are too small, even a small error or expense can send your accounts into the red.
4. It’s all about your people
You’ve got to have your people on your side at times of growth. You may need for them to work longer hours, take on new initiatives quickly and change the way they work at short notice. Your team need to be solid and happy, to be adaptable and flexible, and to willingly work harder for you. These people will make all the difference to your business success.
- Communication is paramount – you’ve got to keep your team in the loop and be transparent about what you need them to do.
- If workloads are going to fluctuate e.g. having to work late all week to get a project finished but the following week is quiet – consider implementing TOIL (time off in lieu) or flexitime for your team. They’ll be much more willing to work late Friday if they know they’re getting Monday morning off!
- Reward, reward, reward – you may feel stressed at this time but remember to openly give praise where praise is deserved, even for small triumphs. Your team may well be stressed and feeling the pressure too, so cut them a little slack and help them where you can.
5. People, people and more people!
An implication of growth may be that you need more staff to take on the extra work. This in itself is a very costly affair – not just advertising the post but also the cost of many working hours: writing job descriptions, choosing from a batch of CV’s, arranging and holding interviews, reference checking and finally on-the-job training.
Don’t cut corners though – if you don’t hire the right person your business may suffer, you’ll have to go through the tricky process of firing them and then you’ve got to recruit all over again.
Also, it’s worth doing a little research into recruitment costs before you start. Advertising can be really expensive, and it can take a long time for the right person to find you – this all depends how niche your vacancy is, where you’re based and the level of skills and experience you require. You may want to consider using a recruitment company to source candidates for you. Some are industry-specific and have a large bank of people ready and waiting. They will advertise and search for candidates on your behalf, which releases you from many hours work. Their fee is usually a percentage of your vacancy’s starting salary, which can total a few thousand pounds – this seems costly but you may find that when you weigh up what you would have to spend in man hours and advertising this may be the cheaper option.
A word to the wise: bringing in new people can be a worrying time for your current team. Some may feel vulnerable, neglected or demoralised. Try to get a sense of your teams’ feelings before a recruitment drive; it may be worth doing the following:
- Display all job openings internally before you externally advertise.
- Welcome applications from your current team and have them interview at the same time as prospective candidates.
- Get your team involved in the recruitment process – they could do a meet and greet, sit in on interviews or chat informally to candidates in the waiting area, then give their feedback to you – this is an incredibly valuable tactic as they may see another side to the candidate than you see in the interview room, and after all, your team will have to work in harmony new people so it’s important to know if they’re going to fit in.
6. Growing room
As your team grows, and the amount of equipment or stock you have increases, you may find you suddenly need more space.
Moving to larger premises can involve lots of work, cost and a fair bit of disruption. Think of the working hours used, the cost of moving everything, and having to change all of your business stationery, adverts, website, banking, post and make sure your clients (new and old) can find you!
If cash flow is a problem you may want to consider leasing an extra premises nearby, to which you could move one of your departments or use for increasing stock storage. This way you’ll have continuity, and can bide your time until you have sufficient funds to find a large enough space to contain all of your operations.
Remember that although moving can be costly and stressful, you can embrace it as an opportunity to do a huge marketing push – there’s nothing like a move and expansion to show all of your clients (old, new and prospective) how brilliantly your business is doing. Sending out ‘we’ve moved’ postcards or an email-shot is a great way to reconnect with clients and remind them about you!
7. Tax grows too
Remember to account and plan for potential rises in taxes – they are not always congruent with rises in sales! If your company is incorporated and your profits go up, you may find your tax bill increases more rapidly than expected because you will move into a higher tax bracket. This is true of your salary too!
8. Celebrate your success
Use growth as a massive opportunity to motivate your team and impress your customers. Sing your success to the rooftops – try to get some local or regional media coverage as they like to print home-grown success stories. Capitalise on the opportunity to do some fresh marketing to let everybody know how great your business is. Read How to Get Someone’s Attention for some of our marketing tips.
We want to hear your business growth stories and hear how you survived… or not! Thanks and good luck!