Growing pains: How to deal with the most common issues of rapid business growth

So you’ve survived the first few years in business. In fact, you’ve done more than survive – you’re thriving and hitting all of your targets much quicker than expected.

You’re scaling up rapidly, and about to take the big step from small to mid-sized business. Well done. I hate to tell you, but it’s at this stage in the lifecycle of most businesses that the real challenges begin.

While the first few years in business are tough, it’s arguable that the growing pains experienced when transitioning to a larger business are just as difficult. Where once your business goals were very clear, and you had the resources to match, now you’re faced with an entirely new set of challenges that will place pressure on your financial resources, your people and your business strategy.

Here’s the most common issues most fast-growing businesses encounter, and how to deal with them:

 

1. Cash flow pressure

The saying ‘cash is king’ rings no truer than when your business is growing rapidly. Everywhere you turn, there are demands on your financial resources, from buying stock, to opening new premises or purchasing equipment.

The best way to overcome the cash flow strain is to have the right finance structures in place. Make sure you have someone in the business who knows their way around a balance sheet and can help you structure your finances in a way that will help ease the pressure in high growth periods. If you don’t have the skills in your business, consider engaging an external business advisor.

2. Conflicted identity

As you grow rapidly, your business may experience an operational identity crisis.  Where once you could run the entire business from a small office with a lean team, now your operations are spread across different offices and locations. At the same time, you don’t have the administration manpower or time to implement complex operational structures to help you do things more efficiently.

Calling on an experienced head will go a long way in helping you deal with this scenario. It might be an investor or mentor who is willing to help steer the ship, or you can engage a trusted business advisor.

3. People predicament

Not only will rapid growth place increased pressure on your financial resources, but it’s also likely to strain your human resources. There’s a risk that staff morale will drop off as they are burdened with extra work demands, which could lead to higher staff turnover.

It’s important to stay focused on your people at all times, no matter how demanding your business growth becomes. Remember, your people are your best asset and have been responsible for driving your business forward so quickly. Consider expanding your human resources area to cope with the extra focus required.

4. Poor customer service

Your rapid growth has been driven by customer demand. But the more customers you have, the greater the demands on your service levels. What once may have been your key strength, has the potential to become a weakness.

Understand the key differentiators that make your business different. If customer service is one of them, make sure that growth doesn’t impact on something that makes you stand out from your competitors.

5. Leadership gap

When your business was smaller, you may have had adequate knowledge among the leadership team to get you through. As you grow, everything becomes more complex. You’re dealing with more complex financial information and sales data, as well as trying to understand different markets and customer segments. This is when you may start to find deficits in your leadership team.

The most efficient way of filling these gaps is to call on the assistance of an experienced business advisor. This way, you gain access to their knowledge and experience, without having to take on the costs and commitment associated with adding a permanent member of staff to the leadership team. Alternatively, you may have access to an investor who can fill knowledge gaps or a mentor who can add value.

Seeing a business through rapid growth can be challenging, but also hugely rewarding. The key to success is to remain alert to the needs of your business, your customers and your people, and to accept that at some point, you may need to call on external guidance to help you through.

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