Growth does not happen overnight. It requires hard and smart work to stand out among your competitors in the cut-throat competition.
To see a company thrive and its earnings reaching an all-time high is something that all business owners want to see. There is no greater joy than achieving growth milestones that can guide your business to the success path.
But managing rapid expansion is challenging. Rapid expansion poses significant issues that must be addressed with caution. If your business witnesses rapid growth, then you need to plan your next steps of action carefully. If you make a mistake, your business’s growth can quickly become the reason for its downfall.
What is a Rapid growth
Rapid growth is a type of business growth that occurs in response to a established growth strategy, unexpected events or demand.
Examples of such activity are a surge in face covering products, demand for online meeting platforms and demand for online groceries shopping as a result of COVID-19.
How to manage Rapid growth?
Here are a few pointers to manage your business if it goes through rapid growth period:
1. Know the reason behind it all
You are on the right track if your startup or small firm is rapidly expanding. However, riding those trails without knowing what you’re doing is a dangerous road to pursue. During rapid expansion, it’s common to lose sight of essential ideals.
You should find out the reasons your company has been able to perform well and ensure that you maintain your growth. Finding out how your business is different from others competing against you in the industry can also help you strategies better.
Examine the assets, sales, inventory, overheads, and receivables of the company. Once you have a clear picture of your financial situation, devise a strategy for evaluating the impact of growth on those aspects to determine how you will need to refinance.
2. Prioritise customer experience
The customers can make or break a business. The old saying, “Customer is King”, still holds true in 21st centruy.
They are the reason that a business witnesses growth. Thus, satisfying the customers needs and ensuring that they get exceptional services should be every business primary goal.
If your company is growing rapidly, do not make the mistake of ignoring the interests of your customers. Providing less than what your customers expect from you can make them shift to the competitors’ goods and services.
One way to ensure whether your customers are satisfied with your products and services is through social media platforms and feedback forms.
If customers are not satisfied with your business, take the necessary measures to resolve their issues and complaints.
It is important to remember that in the digital era, a bad experience can quickly propagate over the internet and ruin your company’s reputation.
3. Focus on established revenue sources
Instead of diverting all your attention towards acquiring new clients, you should also focus on the core consumers that have caused your business to grow.
Having a good and effective loyalty programme can make the customers feel good about using your products or services and encourage them even more.
This can help you expand your current customer base.
4. Do not ignore your working capital requirements
Just because your sales are rising does not necessarily mean that your earnings will also increase. If you have smaller profit margins, then even after a significant increase in sales, your revenue would stay the same.
Take a moment to comprehend your finances beyond just the top-line revenue number before you start spending money on new hires or larger office space.
To determine your company’s health, examine current sales, cost of customer acquisition, customer lifetime value, net margin per customer, breakeven analysis, What-if scenarios. Besides, usually oversight of overhead costs, inventory, assets, liabilities, and operating expenditures.
These figures will assist you in making future estimates and determining how much working capital (money required for the day-to-day activities of a business) you will need.
Working capital = Current assets – Current liabilities
You have a positive working capital if your assets exceed your obligations. A negative working capital shows a deficit and might affect your payment to the creditors.
If you need funding, check out our guide on How to Pitch Your Business Idea to Investors?
5. Build Your Network
As your company grows, having a great network can be beneficial for you. Start developing a network of active business owners with whom you may speak if you don’t already have one. You can seek advice, discuss what has and what hasn’t worked in their enterprises, and learn from it.
Your network is your networth
Developing mutually beneficial partnerships will benefit your company in the long run. If you’re ready for it, business expansion can be a terrific and thrilling idea.
6. Increase available resources to current staff
When a small business expands quickly, its employees typically find themselves with more work than usual. Because a small workforce can soon become overwhelmed by an increasing task, it’s a good idea to supplement your team with additional resources.
Whether as an incentive for overtime, temporary assistance, or access to outside suppliers for activities such as bookkeeping, payroll, outsourcing your finance function, printing proposals, answering phones, or other administrative assistance.
The more outside help your employees receive, the more likely they will handle expansion effectively while still completing all of their responsibilities on schedule.
You can always try to address their demands and give them an outlet to vent by planning a team-building activity. Remember, venting can be a productive if managed well.
A friendly get-together of both employees and management can be perfect for boosting the company’s morale. Getting to know their senior colleagues on a more personal level can increase their faith in you if an issue arises.
To summarise, identify what is causing your rapid business growth, stay in touch with your customers, plan ahead of time for expansion, and keep costs under control while adding resources to your existing workforce.
If you feel that handling rapid growth is causing chaos, you can hire an experienced accountant who can guide you through this. Above all, become a flexible leader who, when flying towards the sun, avoids getting too close to it and soars for an extended period with unburned wings.