The Positive Challenges Experienced During Business Growth
For businesses with a clear and solid reason to grow their business, experiencing rapid business growth is a very exciting time. Orders may be increasing, there’s a rising interest in your brand and maybe the company has even been picked up by business groups as a company to watch. It's probably time you spoke to some business growth consultants, as you're in for a positive, but challenging time ahead.
There are a variety of ‘positive challenges' growing companies face, ranging from ensuring you’re surrounded by the right talent, having the latent capacity to cope with increased demand and the cash flow to support it. Moving your company to the next stage of growth isn’t a step to be taken lightly, there are many risks associated with growth, especially if you’re experiencing rapidly increasing interest in your business. Sometimes, the excitement this represents can lead to some aspects of the business not getting the attention they need. These and other points are considered below.
Remember the clients that helped you build your business.
Your business was likely built on the strength of the early clients you attracted. It’s too easy to forget these foundational clients when so much new business is coming in. The last thing you need is for these clients to feel they are being overlooked, especially if they have been with you for a long time and represent a source of regular income. Their needs should be prioritised, as often it’s their support that represents the revenue you need to keep afloat. In fact, in some cases where growth is funded from operations, it’s those early clients who are funding your growth. To loss of one or more of those could prove disastrous and lead to the loss of new business, as you scramble to repair the damage.
Supply chain strain.
While you may be in a position to expand, are your suppliers in a position to match your needs? A simple question, but sometimes this is something that can become a significant bottleneck to your business growth plans. Naturally, it depends on the type of business you run. Supply chain issues may be a natural consideration in the case of product manufacturing but should be considered in less obvious instances too. For example: In a service based industry such as web design, rather than employing full-time developers, designs may be created internally and the actual development work may be put out to specialist development companies who are better able to deliver completed websites quickly and economically. Here, an increase in clients can mean an increasing workload on this resource network, resulting in delays and disappointed clients.
Supply chain due diligence is essential. You need to know if your partners can grow with you. The last thing you want to have to do is to rush to find a new partner to assist because an established partner can’t cope. Doing this risks everything you have built, as quality, reliability and cost factors all creep in, sometimes even fraud, as more unscrupulous businesses look to cash in on your dilemma and need for a quick fix.
Most businesses have some form of supply chain - make sure your’s has been stress tested before you’re committed.
Business growth comes in many forms. A rapidly increasing base of new clients is certainly one way. However, often, it may be a single client who decides to significantly increase their business with you. Perhaps increasing the range of services they take from you, asking you to take on more work, or, increasing production of specific products, even the introduction of client specific product ranges - bespoke products.
A classic problem can arise here, one of ‘putting all your eggs in one basket’. In these cases, it’s your client that’s experiencing the major growth; you may be a supply chain component. How well do you know their business and how well do you understand their financial strength? Just as you need to do your own due diligence on growth plans, how much due diligence have you done on your supplier?
Quite often, clients at the top of a supply chain can experience cash flow issues, because their end clients don’t pay on time or may withdraw from contracts. Some businesses are more sensitive than others to these scenarios; how sensitive is your business? How many months can your business sustain cash flow restrictions, should a major client delay payments?
Don’t forget the importance of a diversified client base, one that seeks to minimise the impact of client turnover. Ensure you have an ongoing program to bring in new clients or have a mix of clients that mitigates the loss of one. Some businesses may operate on a small, but highly valuable client base; a business model that doesn’t require them to expand their client base often. In such circumstances, finding the right balance in client numbers vs the risk to the business of losing key clients, has to be found.
You don’t need to work in isolation. Talk to a business mentor or other trusted businesses owners who have experienced similar growth. Business growth consultants, such as Berley, are an invaluable source of experience. It’s the small lessons that can mean the most. While most business leaders would naturally consider many of the issues above, at the end of the day, it’s the people in your organisation who deliver on your promises and that leads to questions concerning the core team you trust your business’s growth on. Are they up to the job? Are they prepared to make the commitments and meet the demands that fast growth can place on individuals; to go above and beyond?
Discussing these issues and learning from other’s experiences is crucial to success. For some companies, sizeable growth represents a considerable change from how they previously led a business. Growth in staff, changes in systems and processes, increased financial commitments all lead to considerable added stress. Are you ready for such change? Are your own systems and support people ready for growth? How about essential financial systems, key to the day-to-day operation of your business shuck as accounting and tax planning? For a lot of smaller business owners making this transition means moving from ‘business owner to business leader’. A simple consequence of that is knowing how to delegate and knowing when to say ‘no’ to opportunities.
Growing your team
It goes without saying, having the right people around you in a growing business is essential. It’s not just a matter of simply having the right skill sets either - it’s all about attitude. Businesses seldom run on just a 9 to 5 basis. Often people, need to put in extra effort, especially if clients and customer service is a focal point. You need people around you that you can almost trust your life with, because you can’t be there all the time or expected to be involved in every situation that arises.
Equally, having a happy and enthusiastic workforce is important too. So there has to be a reasonable work/life balance. However, for you at least, the business comes first and those around you are reliant on their jobs. If the business can’t satisfy its clients, there will be no jobs. It’s critical then, to develop a core group of individuals around you that share the same vision and work ethic you do. If you can’t do this, you’ll always be struggling, as key people come and go. There are some excellent examples of how companies have achieved this in the past; one such example is Innocent, the smoothie company.
We hope that this short overview of some of the important issues to consider when growing your business has been useful. Business growth is a natural part of running a business today and remaining competitive. There are many pros and cons to business growth be considered too. However, creating an exciting and dynamic growth company also serves as a magnet to attract great talent, as well as attract great customers too.
Treat the issues identified here as ‘positive challenges’ to growth, something to look forward to! Seek out the assistance of expert business growth advisors, like Berley, to help you successfully achieve your growth plans. Call us today on 020 7788 8261 - you'll realise we are no ordinary business growth consultants.