Managing
Growth
Over time,
companies evolve, in the same way that individuals grow. What
worked in your first stage of business, will not work in later
stages. You, as the owner, will need to develop new skills and
stop being the "doer" and start being the manager and
eventually, the leader.
What are some
of the potential problems that occur when sales soar?
You are understaffed
and hire in a hurry. You hire people who are not properly screened
and trained. Or maybe the employees that you've had in the past,
just aren't cutout for the "new" business, and they
need to be replaced.
You have trouble
filling demand. Suppliers can't get products or supplies out quick
enough or manufacturers can't produce them fast enough; or service
providers don't have the people to continue to provide quality
service. Customers, perhaps even long-time customers, become dissatisfied
and go elsewhere with their business.
Systems aren't
in place to process so many orders or handle so many clients.
You experience
cash pressures, as sales exceed the cash coming in.
Of all of
these problems, the last is the most serious. Undercapitalization
is what kills most small business. You will need to learn many
profit strategies related to managing cash flow and acquiring
capital so that you can avoid undercapitalization. This will assure
that growth has a positive--rather than a negative--impact on
your business.
