For those businesses that manage to overcome the odds, many still experience growing pains. To help your business ramp up for successful growth, focus on these key areas:
Financial: Adequately funding your business?s growth spurts will require continuous updating of financial projections and plans.In the beginning, your business expenses will outpace sales. Keep close track of changes in projected cash flows, so you can make any necessary plan adjustments and avoid running out of funds.You may need to temporarily slow down or gradually phase in expansion plans. Or you may need to look for opportunities to reduce your costs or obtain additional financing to maintain your growth rate.
Operational: As your customer base expands, make sure you can fulfill the increasing demand. If you miss delivery deadlines,customers may quickly become dissatisfied and take their business to a competitor. So collaborate closely with your suppliers to maintain quality standards and ensure timely delivery of supplies and services. Make sure your systems are upgraded to handle greater order volume and look for opportunities to ease workloads through process automation or shared systems with another company.
Space: Expanding business operations means you?ll likely outgrow your facility space at some point. A bigger business naturally means a bigger staff, and more materials, equipment and supplies. Consider how fast and big your business is apt to grow. Remember, you have to pay for the space ? whether it?s used or unused. So, a facility that offers some room to grow is generally beneficial, while too much room may prove overly costly and strain capital. The key is to balance space needs and costs.
Staffing: A growing business also needs more people to support it. Hiring a large number of qualified people, however, requires considerable time, effort ? and money. You will need to conduct searches, place ads, interview candidates, review resumes and follow up with references. Make sure your recruiting staff is equipped for the task with detailed position descriptions, advertising templates and a computerized database for candidate information. Consider outsourcing this department to a professional employer organization (PEO).
Taxes: As your business grows and becomes more profitable, expect your taxes to grow as well. Be prepared by preparing a projection of your taxes based on growth expectations and then budget for higher quarterly taxes.
Prepare now
If your business is experiencing growing pains, sit down with your accountant, business consultant or financial advisor to map out a solid strategy to ensure you have proper funding and are prepared to address operational, space, staffing and tax issues. And if you are successful, prepare to do this on a regular basis.
Jay Trien is Senior Partner of the Morristown accounting and business consulting firm, Trien Rosenberg. He is also the President and founder of the Venture Association New Jersey. Contact him at jay@TrienRosenberg.com.
