Five Tips to Manage A Business in High-Growth

Growth in a business is a requirement for longevity of the methods you used to handle growth and manage the growing pains will determine how your operations will continue. Here are five tips on how you can manage a business in high-growth.

1 – Planning

Without a plan your business is sure to fail.

You need to establish significant growth targets and how you will handle the growth factors.

Creating an operational plan to achieve growth targets happens through:

1. Marketing: Determine how many leads you will require and what you will need to support your growth targets.
2. Sales: determine how many sales need to be converted from your customer leads and how many customers you will need to keep the doors open.
3. Supply and purchasing: document what production is required to satisfy your plan for sales and what needs to be done to provide these services.
4. Logistics: figure out more on vehicles, shipping, transport and warehousing so that you can maintain appropriate stock levels.
5. Staffing: determine what staffing is required to support your additional growth. Consider all the staff you’ll need to manage your paperwork, products and services.
6. Locations: assess when you may need to make a move from your current location and what you might prefer an increased size warehouse or office space.

It’s likely that the conference will come up in different times as your business scales but if you have a plan for each aspect of your business, you can be ready.

Translating operational to finance:

1. Profit and losses: elements of your operational plan need to have costs and revenue associated with them. Look at your scaling staff costs as well as the cost of hiring and recruiting professionals away from day-to-day operations.
2. Balance sheets: movement for profit and loss need to be reflected on balance sheets to ensure that there’s no unintended consequences that could affect your relationship with lending institutions, investors or shareholders. Look at every element of liabilities and assets so you can prepare.
3. Cash flow: all activity in the financial plan an operational plan should be reflected in your cash flow so that you can appropriately scale. Cash flow is often what trips up your plan for growth but if you’re tracking every aspect of your finances, you can manage the increased activity and the cash coming in as well as director cash flow appropriately.

2 – Measure and adjustment

After you’ve agreed upon a plan for dealing, you’ll need to have an accurate measurement and adjustment for how the plan is working out. Measure your activity against the plan on a monthly basis to determine if you need to take corrective action early on. If you’re seeing variance in your plan against your success, you might need to make adjustments. Significant shortfalls will show that the plan could be working but slower than expected.

If you’re experiencing growth faster than expected you’ll also need to make adjustments to your expenditures and ensure that you have the proper funding to scale. Having a plan and adjusting the result will help you to stay in line with the growth trajectory that you’re on. It’s very rare for operations to fall perfectly in line with the plan to measuring your progress remains important.

3 – Communication

Relevant elements of the plan need to be communicated to your external and internal shareholders.

Employees need to be aware of what is expected and there needs to be regular targets for sales, numbers, suppliers, employees and more. Having an indication of when new funding will be obtained and regular lines of communication between your staff and shareholders will make sure that everyone is in the loop.

Your suppliers need to be forewarned as you are scale quickly and when greater volumes are required in order to satisfy the needs of your company. Financial institutions and lenders also need to be kept informed to ensure that they are ready when additional funding is required.

4 – Keep your business up to date

It’s easy to get lost in day-to-day the operation and ignore the activities that you need to promote growth and catalog information. Paperwork processing can slow down if there’s get that need to be collected or if suppliers aren’t getting paid on time. Make sure that all of your accounts are kept up-to-date and you can maintain discipline in every activity of the financial health of your business. Serious issues of cash flow and compliance issues can happen if your records are not well maintained.

5 – Flexibility

Starting with an initial plan is important for scaling quickly but you also need to have flexibility. Communication and adjustments as necessary will keep your business up to date. Building flexibility into the plan and regularly having points where you can make adjustments can be crucial.

Examples:

1. Not committing to a long-term lease while your business is scaling rapidly. Started good relationship with a real estate broker or landlord can offer you a flexible space.
2. Recruiting additional staff for a resource or contract is in place can be a risk. Employee staff on short-term contracts or as occasional workers if you’re experiencing a fast peak growth.
3. Be prepared to seek alternative sources of funding and maintain solid relationships with your lender. Do regular comparisons with other lenders to see if there is better options available.

Stay flexible with any plan that you’re making as there’s always going to be a need for adjustment. Making assumptions that you’ll continue on the same growth is not always a realistic achievement and you could find yourself in unforeseen circumstances such as with Covid 19 or a competitor entering the market.

Short-term growth offers no guarantee of success but if you can manage your growth correctly you can ensure that your business has longevity.