Experienced business owners know that growth is both something to get excited about and approached with caution.
Poorly planned or unchecked growth can cause many problems for your business, including cash flow challenges, production issues, missed sales, customer dissatisfaction and unnecessary stress for your team.
Thus, it’s important to plan for growth and take steps to prevent common mistakes that cause growth-related issues. Here are three things to consider that will help you prepare for future growth.
Preparation for growth starts from within. Prepare your people.
This means both instilling in them the required mindset and developing the appropriate behaviors and skills that will position them for success in your future, expanded company.
What message do you need to communicate, and have your team accept, to gain their full support and motivation? Which employees will need to be developed in what areas for your larger operation to be successful?
Will you need to create new positions and hire externally? Your human resource coordinator may need to become well-versed in certain employment laws or your production manager may need to learn a new quality-control technique.
Chances are at least one person in your business will have to undertake some professional growth. Take an inventory of all of your team’s capabilities and then make a list of what capabilities will be needed to operate on the envisioned larger scale.
The gaps are where you need to focus your development efforts. Don’t forget to look at yourself, too.
As a company expands, practices and traditions that were once helpful may lose their usefulness and need to be streamlined or eliminated. Evaluate your internal processes and procedures to determine what modifications will need to be made.
It’s unlikely that a company generating $400,000 in annual sales will be able to grow to $4 million in annual sales by doing business as usual. What processes will need to be changed to ensure you can meet the increased demand?
How efficient are your processes currently and how far will these efficiencies go in your expanded company? Growth inevitably will call for process adjustments, if not re-creation.
Flowcharting is a great way to help you perform this analysis. You can use software or just a pencil and paper to diagram the flow of all of the current processes and procedures in your business.
After this is done, determine where you can create additional efficiencies. What can you add that will help? What can you remove that will help?
Change to your company will affect many different people, both internally and externally. Perform a stakeholder analysis to determine who will be affected by the changes.
Which employees will be affected directly through new responsibilities or organizational restructuring? Which vendors will be affected by a change in purchasing procedures or inventory?
Will there be delays or interruptions to existing orders for your customers? How will your competitors be affected and how are they likely to respond? Will your company’s growth affect the community and how?
While flowcharting your processes and procedures will help you see the details, stakeholder analysis helps you take a step back and look at the big picture. Understanding who all of your company’s different stakeholders are and what their interests are will enable you to form strategies for proactively managing any issues.
Growth can cause a lot of unexpected issues for a business, but with the proper thought and planning performed well in advance of implementation, the number of issues can be minimized.
Jason Anderson is director of the Georgia Southern University Small Business Development Center and may be contacted at firstname.lastname@example.org. Find out more at coba.georgiasouthern.edu/sbdc/.