It’s rewarding to see your small business grow from a simple idea to a viable company that delivers value to your customers. When there is a surge in sales, it presents both opportunities and challenges.
Aggressive growth is good, but you also need to stay in control of your business. The key is to stay focused on the fundamental reasons your customers choose your products or services and your brand, maintain high quality, and always deliver an outstanding customer experience while you are expanding.
The big question for many entrepreneurs is how do you do this successfully while managing growth?
1. Maintaining a manageable pace of growth
The most important step in any growth strategy is to build a plan. Determine how much you want to grow, the timeline and the resources required to reach your goal, and then develop a business plan to support these objectives. The plan should include how day-to-day operations will be impacted, the people and roles that need to be put in place, any changes to your sales and marketing efforts needed and how the business will track progress in fulfilling the plan.
You will also want to identify risks that may impede your expansion. For example, are there any departments having difficulties today? If an area of your business is struggling now, rapid growth will only make it worse, so resolve any issues before launching your growth strategy.
2. Hiring employees
If you’re like many small business owners, you probably agree that the most important attribute when hiring is attitude. If a person has a good attitude, is hard working and willing to help out, but may not have a specific skill set, you can always train them. When you trust the people you work with and give them the authority to make decisions, they become an important part of your company’s growth.
As your business is growing you may not initially have the resources to hire full-time employees. Consider different hiring options – contract, part-time or freelance. You may not need a full-time bookkeeper, but can hire someone to come in one day a week to do your invoicing and receivables.
3. Deciding to delegate
When starting a new business, most entrepreneurs do everything themselves – from developing or sourcing products, or delivering services, to marketing, sales, accounting and more. To help you grow successfully you should consider hiring people to delegate some of the work load. This is not always easy for an entrepreneur who has a vision of how to run his or her business.
To sustain growth, you have to relinquish control to the competent people you’ve hired. Recognize that you don’t have all the skill sets — nor the time — to continue to be the expert in everything. When you are ready to hire, look for individuals who are better than you in certain areas of your business operations. For example, if you are the face of the business, hire someone to work on the administrative tasks so you can continue to meet with clients and ensure they are happy. As a business owner, your job is to provide these talented individuals you’ve selected with everything they need to do their jobs. Know that not everyone is going to perform tasks exactly as you do, and that’s okay.
4. Managing changes in demand
Every business has a different sales cycle. Some products are seasonal, some are timeless. Others such as food and drink have a limited shelf life. Where you manufacture your product will also impact your business cycles – if you source products overseas, you will need a longer lead time to ensure inventory is available to meet demand. No business owner ever wants to miss a sale due to lack of inventory, so be prepared for an increase in demand and stock a little more product.
To manage regular sales cycles it is important to watch and analyze your data. Look at year over year numbers to spot growth trends and opportunities. Know your timing for manufacturing or product delivery. If you have a peak period, have a back-up plan with alternate suppliers and producers, and short-term labour you can bring in quickly to meet demand during your busy times.
If you want to expand your product offerings, use this checklist to prepare your business.
5. Reinvesting in your business
You know that your business is in a constant state of evolution, and you may be thinking what’s next? Consider your goals. Do you want to expand your product offerings? Do you want to reach new markets?
When you’ve decided on your next steps, review your strategic business plan, make any updates to reflect these changes, and determine what it will take to accomplish it. For example, if you want to grow your market, it may be necessary to open a new storefront.
You’ll need to research the best location, negotiate the lease, plan renovations and hire staff. All of this will require capital. Examine the numbers before making any reinvestment decisions.
As a small business owner, it is exciting to see your hard work pay off as your business continues to grow. A little planning will go a long way to ensuring sustainable, manageable growth and ultimately, business success.
Learn how to assess a new growth market with this white paper.
For more tips on growing your business, visit #RBCSmallBiz Panel Discussion – Managing Your Business Growth.
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This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
