Happy days are here! Your small business is booming, with a seemingly endless string of product orders or requests for your services. That’s good…right?
At first glance, yes. But there is such a thing as too much success. If you are not ready to handle a sudden ramp-up, you risk shortchanging your customers with poor quality work and missed deadlines. The added costs of meeting this demand may outstrip your profit margin, turning what should be a boom into a bust for your bottom line. You may well long for the days when you weren’t so popular; and in worst-case scenarios, that could easily become a permanent result.
One key for managing growth is to recognize your limitations. While starting a business requires a healthy measure of self-confidence, “an inflated ego will inhibit company growth and could cause you to burn out and shut down completely. If you’re already maxed out on time, there’s no way you’ll be able to take your business to the next level.”
Managing growth means making good decisions, so you need to step back and get an accurate picture of where everything stands. Is this a temporary spurt or the start of a sustained uptick in business? What resources are available to help you meet this demand, and are new suppliers readily available? If so, how much will utilizing them cost?
Weigh your options against your cash flow and other resources. For example, hiring temporary workers may not be as affordable as overtime for your current staff.
Don’t make promises to your customers that you can’t keep. Explain that you’re short on time or inventory, and specify how long they may have to wait before you can fill the order or take on the assignment. Some people will be willing to wait, others will look elsewhere. Refer opportunities you can’t handle to other vendors or contractors who you trust. Customers will appreciate your candor, and remember you as a problem-solver. That increases the likelihood that they will come back.
A small business can also take steps to manage growth before it occurs by finding ways to systematize its operations.
“When you systematize your processes—everything from concept to delivery of goods or services—the result is a more efficient, profitable company that can easily handle rapid growth. When you have repeatable, teachable systems in place, you can easily expand your staff to fill that crazy big order.”
For more help with planning for growth, contact SCORE or find a mentor today!
About the Author: David Inskeep is a long-time SCORE volunteer, contributing writer, and retired commercial lender. He can be reached at firstname.lastname@example.org.