A classic definition of an entrepreneur is someone who builds the ship while they are sailing it. This way of doing business works fine in calm waters but fares far less well in the kind of storm that descends if a company experiences sudden, explosive growth.
While every company want to expand and finding yourself in a situation where sales are taking off will make you the envy of many, the reality is that rapid growth can be as much of a foe as a friend and failing to deal with the issues properly can actually set your company back. Read on for a few tips on how to make the most of such situations.
Isolate the causes
If your company is growing much faster than expected, it’s important to identify exactly why, so that you can work out the best way to respond. If it is due to market conditions beyond your control, factoring this into the equation will make it easier to predict how long the growth spurt will last.
If the growth is simply the result of the excellent products or services you offer, the key is to maintain those high standards while expanding your operation. If, for example, your business is expanding rapidly directly as a result of the high levels of customer service you offer, ensure you make it a priority to retain those qualities as you expand. Failing to do so means you risk losing your most loyal customers and this could have a knock-on effect that could ultimately see you heading down the path towards liquidation.
Reinforce your finances
Don’t fall into the trap of thinking that increased sales automatically mean increased profits. A growing business means growing overheads, and you need to have a rigorous financial plan in place to ensure the growth is sustainable. In many situations, this may mean urgently seeking new sources of finance.
Consider non-traditional avenues that offer faster results. The beauty of peer to peer lending is that you can borrow money without having to use an official financial institution as an intermediary, meaning you can receive your loan in weeks rather than months. If your company is experiencing a period of rapid growth and you need a significant cash injection to take advantage of the opportunities this presents, this kind of lending may be ideal.
Be aware of the hazards
Once you secure the additional finance you need and press ahead with your expansion plans, there are a number of pitfalls you need to be on the lookout for. A key issue is the hiring of staff. While you may have searched long and hard and agonized over the decision about who to take on as your first few employees, the need to respond to rapid growth in the business means you risk taking on whoever is available rather than whoever is best suited to the job.
Regardless of how good your products or services are, you’ll only be able to take advantage of opportunities for growth by having the right team behind you. So, far as possible, try to preserve the culture of the company and hire only those workers whose vision of the future of the enterprise is in sync with your own.