It’s an exciting time when your small business finally picks up speed. You’re consistently selling a high number of products or you’re booked full of appointments with clients. With so much going on, it’s easy for operations to spiral out of control. The quality of your products or service may diminish and you may have a few angry customers on your hand when things go wrong. Another common problem is going out of business from not having enough money to keep going. The problem actually isn’t lack of money but poor money management. Continue reading to learn how to strategically manage small business growth and prevent these problems that can hurt your growing business.
Prioritize Customer Retention
A mistake some small business owners make during periods of high growth is ignoring their customers. However, it’s easier and cheaper to retain current customers than to gain new ones. Continue prioritizing making customers happy, so that they hopefully return again and say positive things about your business to their friends and family. Word of mouth marketing is powerful. You don’t want it working against your business.
Take Care of the Financials
Just because your business is growing doesn’t mean you’re profitable. Scaling the business can be a cash hog, and cash-flow problems can disrupt your operations and micromanage your leverage structure. You must stay on top of your financials to effectively manage small business growth. If it’s an area you struggle with, then seek help from a professional. You can let them handle the financials while you focus on what you do best. Examples of financial areas a small business should address during growth are projected employee costs, planning for hiring employees, and understanding their cash flow. Create a business budget if you don’t already have one.
Implement a Quality Control System
When business expands, quality sometimes goes down. Ensure your small business maintains the quality of its products and services by implementing a quality control system. Clearly define indicators of quality in your product or service. Then, delegate the task of checking for quality to an employee within your management model. Once your business is large enough, you can have a team dedicated to quality control.
The transition from small to medium-sized business can be tricky to navigate alone. Owners become managers (or hire managers), cash flow becomes more formalized, more processes become outsourced, and in many cases the legal structure of the business changes. When assets become significant enough, it may be worth it to consider reorganizing the business as an S-Corp or LLC. If you have a partnership, be sure the terms of the partnership are very specifically spelled out in a strong partnership contract that covers what happens in the event of partnership withdrawal, whether that occurs because of death, divorce, disinterest, disease, or other difficulty. If you are nearing a milestone or are concerned about the continued health of your growing business, don’t hesitate to get legal help for your business to maintain your growth trajectory.
Many small businesses get themselves into hot water by trying to own their first or second office. Owning your own property gives you a level of control and security that is certainly desirable, but periods of explosive growth are the wrong time to make the move to an owned property (especially if that growth is happening when the business is young). Have the patience to wait until the business has matured and revenues are steadier and more predictable. According to a center for Storage Units in Carson, renting long-term storage can help businesses bridge the gap between offices during periods of growth.
It’s important to be organized and delegate tasks when your small business grows. Although you may have handled a wide array of tasks in the beginning, doing so becomes less feasible as your business expands. You must also remember that your business couldn’t exist without people willing to buy your products. Some people lose sight of that when they get caught up in trying to manage the seemingly unmanageable growth. By following the three tips listed above, managing growth will become easier for you.