Growth is a primary objective for most, if not all businesses. Growth can often happen without noticing, starting out an entrepreneur with a vision, and suddenly a few years later there are 10 employees, this is a scary but exciting change. It is therefore vital that you are able to take control and manage your own growth – don’t let the growth take control of you!
Here at HolyBrook we are at an exciting stage of growth and development where we have seen an increased demand for our services resulting in the need to add 2 new members to our staff team in the last few months (you can read more about the team here).
Planning for growth
The most common reasons for business failure is due to lack of planning whether short-term or long-term. In order to achieve effective growth the first step is to plan – ‘If you fail to plan, you are planning to fail!’- Benjamin Franklin. By regularly reviewing your business plan it ensures that you are regularly meeting the needs of the business. It also allows you to identify key growth areas to target, making growth more focused. Regularly assessing performance against targets means that you are more likely to achieve your goals, investigate and variance and act accordingly. By reviewing finances e.g. through the effective use of Xero, you can monitor patterns and pull off reports to help plan ahead financially.
It is important to review the staff team so the business is able to support the staff through this period of growth. Making sure they’re kept informed by regular meet-ups and therefore motivated, keeping an eye on their workload, ensuring effective line management support is in place which you allude to in reviewing structures. Maybe consider short-term increase of resources like temporary or casual staff so you’re not over committed but able to meet short-term demands.
A common problem of growing too fast is that communication can become lost between employees. As the business grows, no one fully knows what everyone is doing – resulting in problems such as miscommunication, important information being lost and information being processed slowly from the top to the bottom of the hierarchy. If communication becomes ineffective it can cause productivity and efficiency to decline, which in turn can increase your costs.
Although difficult, it is important to ensure that you are able to keep track of employees whether you have 1 or 100. The solution to this could be reviewing your structure, holding weekly meetings, or using software such as asana and toggl to track what work needs to be done, what work employees are doing, and if there are any overdue work.
Reviewing the structure of the business
Poor structure can be a key indicator of failing to control growth, as well as the previous highlighted issue of poor communication, structure can cause other issues. Different levels of management may need to be established, upskilling existing staff and identifying new line managers to oversee direct reports. This means that higher levels of managements time can be freed up and offers development opportunities for other colleagues.
Expanding too quickly: the problems of rapid growth
It can be mistaken that the growth of accounts receivable means that this will be replicated through cash based growth, this may not be the case. Rapid growth can cause major cash flow problems- overall there are bigger outgoings e.g. as fixed costs increase so you would hope that an increase in income would also increase. It may be true that income increases in the short term, but it may not happen for the long term period. It is therefore important to understand whether this is long term or short term and ensure that growth is sustainable. Make sure you ask yourself – ‘do you have the amount of resources available for the workload?’ or ‘do you need to increase employees so capacity can increase?’
Another disadvantage of rapid growth can be that the quality of your product or service can increase. Employees take on too much workload so focus on getting as much done rather than the task at hand, this can mean that the business can lose clients and brand competitiveness. To ensure that this doesn’t happen make sure to keep track of quality control and review client feedback as part of your business expansion to protect your clients satisfaction.
A lesson to learn
The common misconception is that all growth is good growth, but this is not the case. Unmanaged growth can lead to inadequate cash flow, costs can increase without revenue increasing proportionally which can eventually result in business failure. Not having the resources to increase capacity can cause growth to come to a standstill and taking on too much workload retrospective to the employees can cause stress and dissatisfaction upon your employees.
Therefore, it can be said that by reviewing your business plan as part of your routine and taking on these other factors will help ensure that your growth is sustainable and you grow the right way!