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Guide to Managing Business Growth

A Guide to Managing Business Growth

Managing and sustaining growth, though highly desirable, can be loaded with pitfalls, both foreseen and unforeseen. Here are a few of the growth issues you may have to contend with, and a few tips in how to reduce their impact.



Preserving cash, keeping people motivated, and continually finding more office space are just a few of the issues that you will encounter. Planning well in advance is the key in helping to minimize any negative effects the business may suffer.

Expanding your workforce

Growing your business can mean growing your workforce, and it is very easy to underestimate the time and cost involved in hiring new people—and, more importantly, the right people.

Developing job descriptions, posting ads, sorting through resumes, conducting and arranging interviews, and checking references all involve a large investment of time. However, it is important to be diligent in conducting a careful recruiting process. If you end up with someone who can’t perform the job properly, your business performance could suffer.

Having to then fire them can then engender bad morale and run some legal risks, and you will have to go through the entire time-consuming recruitment process again. This is time taken from the management of regular business activities.

Moreover advertising positions can be expensive. Many small businesses underestimate the out-of-pocket costs necessary to conduct a employee search. Firms can often find themselves advertising over an extended period of time in order to attract qualified candidates—especially for more demanding positions. You need to be prepared for this.

The investment in people
The importance of having highly competent people in a fast-growth business cannot be overestimated. Workloads may be unpredictable, and new issues and problems could require innovative solutions to be implemented quickly. People who can think on their feet, adapt well to constant change, and willingly put in the extra hours to help grow the business are not easy to find, but make all the difference to long-term success.

The influx of new staff can leave current employees feeling threatened, undermined, or neglected. To avoid this post all job openings internally before, you advertising externally, and give existing staff ample opportunity to interview alongside new candidates.

Cash-flow management
A quickly growing business can burn money. Despite good profits, there could be times when a growing business will suffer a cash flow crisis as expenditures occur before expected sales are realized. Businesses with inventory or receivables risk running into this issue particularly fast. An improperly planned cash-flow is one of the most common reasons why small businesses fail during a growth spurt.

The importance of adaptable planning
The faster a business is growing the more difficult it can be to definitively plan future expenditure and income, but this is vital. Careful planning and especially constant updating of plans, particularly cash flow projections, is of paramount importance. While most businesses undertake a major review of projections and business plan once a year, with occasional minor revisions, a fast growing business has to consider drastically overhauling its plans, or at least its cash flow projections, several times during the year to take into account significant deviations from what was previously projected.

All important profit margins
In a rapidly growing business it is easy to become excited about rapidly rising sales and lose track of actual profits. If companies become ‘top-heavy’ in management expenses as they grow, transitional phases overhead expenses can mount and bring down profit margins which are essential for growth. Even if you are trying to finance growth internally, good profit margins still leave more room for error. If profit margins are reduced even a small mistake or increase in expenses can push the firm into the red.

Taxes
You cannot assume that taxes rise parallel to increases in sales, and not accounting for this can lead to problems. As a business becomes more profitable and grows, the tax bill will likely increase at a higher rate than anticipated, because either you personally, or the company (if it is incorporated), will move into a higher tax bracket.

New space requirements
A growing business often means an increasing amount of space for either staff, or equipment/stock, but moving can be disruptive to operations. A good compromise is to try to attach an option to a lease allowing you to continue renting for renewable twelve-month periods of time after an initial two- to three-year firm commitment.

An ideal facility would be one that has a small amount of growth space in-built. If space becomes tight consider renting a separate, nearby space for one group or department until such time as you can afford to rent a space large enough to hold all of your staff.

Growth itself can prove to be a great motivating force for employees and help project a very positive image to customers. Though it may not be stereotypical ‘British’ business advice, trumpet your successes continually to both employees and customers to derive the maximum benefit from your growth!

The Ten Keys to Business Success


There are ten critical areas where your ability to think largely determines the success or failure of your business. The greater clarity you have in each of these areas, the better decisions you will make and better results you will achieve.

Key Purpose
What is the purpose of a business? Many people think that the purpose of a business is to earn a profit, but they are wrong. The true purpose of a business is to create and keep a customer. Fully 50 percent of your time, efforts, and expenses should be focused on creating and keeping customers in some way. One person can only keep a few customers.

Key Measure
The key measure of business success is customer satisfaction. Your ability to satisfy your customers to such a degree that they buy from you rather than from someone else, that they buy again, and that they bring their friends is the key determinant of growth and profitability.

Key Requirement
The key requirement for wealth building and business success is for you to add value in some way. All wealth comes from adding value. All business growth and profitability come from adding value. Every day, you must be looking for ways to add more and more value to the customer experience.

Key Focus
The most important person in the business is the customer. You must focus on the customer at all times. Customers are fickle, disloyal, changeable, impatient, and demanding--just like you. Nonetheless, the customer must be the central focus of everything you do in business.

"Out-Think, Out-Market and Out-Sell the Competition"
Clear planning and goal setting are essential to seeing your business succeed.

Turbo strategy will help you revitalise your business and personal life and help you achieve the results you are looking for to make your business dreams become reality!

Key Word
In life, work, and business, you will always be rewarded in direct proportion to the value of your contribution to others, as they see it. The focus on outward contribution, to your company, your customers, and your community, is the central requirement for you to become an ever more valuable person, in every area.

Key Question
The most important question you ask, to solve any issue, overcome any obstacle, or achieve any business goal is "How?" Top people always ask the question "How?" and then act on the answers that come to them.

Key Strategy
In a world of rapid change and continuing aggressive competition, you must practice continuous improvement in every area of your business and personal life. As Pat Riley, the basketball coach, said, "If you're not getting better, you're getting worse."

Key Activity
The heartbeat of your business is sales. Dun & Bradstreet analyzed thousands of companies that had gone broke over the years and concluded that the number-one reason for business failure was "low sales". When they researched further, they found that the number-one reason for business success was "high sales." And all else was commentary.

Key Number
The most important number in business is cash flow. Cash flow is to the business as blood and oxygen are to the brain. You can have every activity working efficiently in your business, but if your cash flow is cut off for any reason, the business can die, sometimes overnight.

Key Goal
Every business must have a growth plan. Growth must be the goal of all your business activities. You should have a goal to grow 10 percent, 20 percent, or even 30 percent each year. Some companies grow 50 percent and 100 percent per year, and not by accident. The only real growth is profit growth. Profit growth is always measurable in what is called "free cash flow." This is the actual amount of money that the business throws off each month, each quarter, and each year, above and beyond the total cost and expense of running a business. Growth will only come from affiliates.

Action Exercise
You should have a growth plan for the number of new leads you attract and for the number of new customers you acquire from those leads. You should have a growth plan for sales, revenues, and profitability. If you do not deliberately plan for continuous growth, you will automatically stagnate and begin to fall behind. Growth is not an accident; so you must plan and map out your growth plan if you want your business to see a bright future.

The art is listening to people who are successful and then you will be successful.




“I am a registered and qualified/approved Business Growth Coach for GrowthAccelerator helping ambitious businesses achieve rapid and sustainable growth by providing tailored expert advice. Find out more at http://www.growthaccelerator.com

"Get More Done Faster and Easier Than Ever Before"
Unlock the secrets to achieving all your goals and having more free time!

YOU CAN do more and EARN more with the strategies and methods in this life-changing program. Invest in the comprehensive book `Accelerate with Impact` ISBN: 978-1-84549-289-2

Now go and be more successful.

--- --- ---
Written and submitted by:

Dr Colin Thompson
Managing Partner
Direct: + 44 (0) 121 247 4589
Mobile: 07831 588310
Office: + 44 (0) 121 244 1802
email: colin@cavendish-mr.org.uk
Skype: colin.thompson384


http://www.cavendish-mr.org.uk

The Cavendish Academy
http://www.linkedin.com/e/-tc85tw-gbkla9w4-1f/vgh/3212542/
--- --- ---

Guide to Managing Business Growth!

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