Company growth is a desirable thing for most business owners, but if it is mismanaged, it can actually cost you money. Failing to manage and properly plan for rapid growth can lead to a myriad of problems later down the line. In a worst case scenario, it could leave your staff overworked and stressed, your customers feeling under-valued, and generally poison the atmosphere of your business.
On the other hand, if you manage company growth well, your company will grow and thrive, bringing in more profit that you can use to grow your business further, and reward your best staff with better salaries and bonuses. My business has trebled in size over the last six years, and in that time I’ve learned a lot first hand about how to grow a business. Here are my tips.
Set out a growth strategy, and stick to it
Before you start growing your business, you need a strategy. Sit down with your top members of staff and devise a strategy. Where is the new business going to come from? Who is going to win it? Once it’s been won, are you confident you can deliver? Is growing the business in this way sustainable? You need to ask yourselves all of these questions, and come up with watertight answers to each. You then need to devise a time frame, detailing how much progress you expect to have made in the short, medium, and long term. You also need to set specific milestones along the way to measure yourself by.
Once you’ve built a plan that you’re happy with, and you have got all your management staff to agree to it, you have to stick to it. Muddled thinking will only complicate the process, so it is vital that everyone at the company is pulling in the same direction.
Related: Business scaling strategy – How to manage growth
Ensure that growth is sustainable
Many businesses make the mistake of taking on more work than their workforce can handle, growing exponentially in the short term, but then coming unstuck in the long term. As a business owner, you need to make sure that your growth strategy will work in the long term. If you don’t do this, all of the early success you will achieve is essentially built on sand, and will begin to crumble before too long.
So what factors make growth sustainable? Firstly, client retention is absolutely key. It is no good going out there and working overtime to win new clients if you can’t keep the ones you already have. Losing clients will just make any growth you do achieve null and void.
Secondly, you need to ensure that your staff can cope with the work put in front of them. If you’re winning new business, but your staff don’t have the capacity to deliver on it properly, your new clients (and maybe some of your existing ones) will get annoyed and drop off. You can fix these issues by keeping an eye on your management team’s workload, and knowing when to bite the bullet and make a new hire. This leads me onto my next point.
Don’t be afraid to hire, and hire smart
When you’re growing your business, knowing when to hire is absolutely vital. Sometimes the temptation can be to avoid hiring a new member of staff even though you know you need one, so as to avoid the investment of their monthly salary. This kind of attitude will get you in trouble, leaving your staff overworked and customers underserviced. Both of these can combine to halt – or even reverse – the business growth you’ve been working so hard towards. Never be afraid to hire a new member of staff if you need one, and when you do, make sure you hire smart.
Every hire is a calculated risk. Even the most rigorous of interview processes can’t clue you in on exactly what a candidate is like to work with, or how they will affect the dynamics of your business. Because of this, you need to hire smart. You know what function this new staff member will serve in your business, so make sure that you’re confident of their ability to deliver it before offering them a job. If you have any question marks about their ability whatsoever, don’t make them an offer until you’re satisfied. Always take references too – you’d be amazed how many people don’t bother, and find things out later that could have affected their decision.
Additionally, don’t be afraid to pay a candidate top dollar if you really think they’ll add something to your business. An expensive hire can be damaging if you get it wrong – so be careful – but if you bring in the right person it can really help you grow.
Make sure your management team can cope
When you’re growing your company, it’s likely that – at least in the short to medium term – your management team will be expected to take on more work. For example, a manager who previously managed three people may end up managing ten, or managing five clients when previously they were just in charge of one. As the owner of the business, you need to be constantly aware of everything that’s going on with your management team, so you can identify issues and work through them as they arise. Open up communication channels with your management team, and make sure they feel confident coming to you with any issues so that you can work through them together.
Don’t be afraid to spend, but keep an eye on your margins
You have to spend money to make money. It’s a cliché, but it’s true. Spending money on bringing in new staff, training existing staff, and expanding your premises are all potential costs associated with rapid growth – and I can tell you from experience that they’re not the only ones! Don’t be afraid to spend money where necessary, but always keep one eye on your profit margins. If you have a lot of outgoing costs in the short term, you can afford to take financial pain for a month or two as long as there’s money in the bank to cover for it, but if this is an ongoing problem you could be in real trouble. You need to make sure that in a normal month the business is generating cash and is profitable.
Mark Garius is managing director of ASL Group.
Further reading on company growth
