Record Grabber: Business Growth
Small businesses generally love the word “growth” since in relation to a business, it usually means success and profit. A growing business is a developing business, or so most people believe. Unfortunately, many small businesses discover the hard way that growth can result in problems if your business is not equipped to handle this growth – and can even hurt your business in the long run!
All growing businesses eventually reach their limit. You could run out of employees to handle the new volume of orders or customers, or you could not have enough product to meet demand. Most small businesses work to manage operational issues during a growth phase, and it can be hard to choose whether it’s time to hire additional employees or if this influx is just a short-term spike in sales or customer volume. The following are helpful tips for managing growth in a small business.
Maintain Owner/Management Role
If you find yourself carrying out the tasks of your employees – creating the products or accomplishing the services your company offers, it’s time to look at the big picture. As the business owner, you need to maintain a management role in the business. If you don’t have enough manpower without you on the front lines, it’s time to either replace existing employees who are not producing the necessary return on investment (what you pay them), or hire additional employees so that you can focus on the administration, management, and strategy of your business.
Add Organizational Procedures
When a business is started, many small business owners check over the details of their employee’s work, correct mistakes or problems before it reaches the customer, and keep a close eye on how everything is running. If you are growing rapidly, you won’t have time to continue overseeing with as much detail and scrutiny. A business needs procedures for managing staff and providing the best possible products or services of the company. There should be product or service quality control standards to ensure your business turns out the same quality whether you are in a slow period or a growth period. Looking into your daily business operations can help determine what tasks can follow certain procedures, and then get everyone on board. When your business relies on certain procedures, it will manage growth much better than scrambling to keep up as your business expands.
Keeping Growth in Check
For most business owners, growth is encouraged but it’s important to keep this growth in check. When you start generating more sales than previously when you started your business, it can be tempting to spend more money than you’re able to – perhaps you decide to upgrade computers or technology, or even hire more staff to help handle this new business growth. Both of these examples are excellent uses of your business income, but if you’re not careful you may spend more than you can really afford. This then damages your financial stability and your business as a whole. The growth phase that could have resulted in higher profits could easily turn around and cause a cash flow problem if you aren’t careful to keep the business growth in check.
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