While a growing business may seem like a nice class of problem to have, it’s not all plain sailing.
“One of the biggest traps a small business can fall into is becoming a victim of its own success. The business grows faster than it plans to and, for many entrepreneurs, the idea of saying no to work is just foreign to them,” says Michael Fingland, managing director of business turnaround specialist Vantage Performance. Fingland was speaking with the Sydney Morning Herald’s Alexandra Cain and told her that businesses in this situation often don’t have the appropriate systems and controls or the right staff to manage the growth, which can compromise ongoing success. I’ve got to come clean and say that we’ve been having this problem ourselves. As the marketing strategy and execution services we provide for medium-sized enterprises (under our brand Talking Brand) has grown, I’ve seen how much it’s stretched our systems and made me question the real focus of the business. It’s also forced me to realise one key thing: there’s only so much you can do. So recently, I decided to make some important changes like mothballing the Sydney Small Business Centre and the courses we offer to small business owners. We’re now only focusing on Talking Brand, instead of trying to run what are effectively two businesses, which leads me to something more universal: my top six business tips for surviving rapid business growth.
Top six tips for surviving rapid business growth
- Remember plans are fine – but when you get on the court, it’s OK to change the game. If you need to change tack because of what you now know, do it.
- Manage cash. Cash flow is everything, so keep debtors days down and a tight watch on overheads.
- Develop systems. As tempting as it is to say ‘yes’ to all that new business, sometimes you just need to say ‘yes, but not now’. And invest the time in people to develop the systems… as hard as that can be sometimes!
- Manage cost and profit. Is the growth you’re experiencing profitable? Make sure you’ve got the tools in place to manage margin and adjust pricing if you need to.
- Make sure you’re still working on the business, as well as in it. The reality is that if your business is still in its infancy, you’re unlikely to be able to just work on it. However, allocate your time so that you don’t just do all that work that’s coming in the door…
