3 Things Fast-Growing Businesses do Right
Written by: Bandana Jain, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
As businesses settle into a new reality and make plans to refocus their businesses, growing pains are a real thing – we’ve all experienced them in our personal lives, and they also exist in the world of business. They are the temporary challenges a business faces when it enters a rapid growth period or major restructure phase. While they are a normal part of any expanding business, it’s essential to keep an eye on your business’s ‘pain threshold’, to ensure that the temporary challenges don’t become permanent ones.
Businesses operate in continually changing environments. People, competition, markets, laws, and technology are continuously in flux. When change takes place in one area, it has a potential knock-on effect on all of the others. Businesses should aim for agile and aligned teams, sustainable growth that is supported by strong governance, and a clear, flexible strategy that confirms the feasibility of the business model and sets the stage for its growth and development.
Increased revenue, optimized costs, maturity, and new opportunities are all synonymous with growth, but these are usually linked with new risks and trials, from both internal and external market forces. By planning ahead, you can navigate these challenges with relative ease.
Here are three things that successful businesses need to do well to remain sustainable and manage growth:
Manage your finances In running a profitable and sustainable business today, it is a given that you need to spend money to make money. In a growing business, extra cash is crucial to keeping up with the increased demands placed on daily operations. For example, you might need to order more stock, hire additional staff, or buy new equipment. If you don’t keep a close eye on these overheads, they can spiral out of control, and place unnecessary strain on cash flow. A possible solution is to take out financing – like a working capital loan or Peer-to-Peer lending platforms – to cover immediate expenses. You’ll need to keep a tight handle on your spending though, as it is quite possible to be blindsided by fixed costs – some of which aren’t sometimes really fixed if analyzed properly. It’s important to know that banks and other financial institutions consider fast-growing small businesses risky ventures. Manage your finances well and honour your debt repayments. It will reflect positively on your record when you need additional financing. Taking out a loan is not your only option. You can also consider solutions such as negotiating better payment terms and discounts with suppliers, outsourcing, converting unused assets into cash, leasing assets instead of buying, and restructuring your debt. The main financial goal is always to maximize business value. Look beyond organic growth and find strategic partners who can help you achieve greater operational efficiency and maximise gains at scale.
Manage your people and culture Having a culture that promotes collaboration, open communication, flexibility and engagement will helpkeep employees motivated, which, in turn, ensures a positive impact on their productivity and creativity. Culture, people, and environment are intricately linked and are vital to overcoming growing pains. As a business grows, change is inevitable. It is crucial to effectively manage this change because it will impact your employees, and they ultimately influence the success of your business. Teams need to be guided and supported through this change. Otherwise, they could feel overwhelmed and pressured, which may lead to internal friction and poor customer service. Planning for internal challenges is key to managing your people effectively. As part of this priority, give your people the opportunities to develop their skills, provide them with adequate training in line with business growth, and ensure your team has the best tools for the job. Setting strategic goals will help guide your management team in identifying high-potential individuals as well as likely skills gaps. Important notes on people: if you need to increase your workforce, make sure you prioritize culture first and skills second when hiring. While people can learn how to do a better job, they cannot be taught how to align with your value set and purpose. Making a bad hire often results in reduced job satisfaction across much of the business. Outsourcing to a consultant or a freelancer is often cheaper than hiring a full-time resource. Also considering modern tools like Robotic Process Automatic (RPA) help optimal utilization of human resources. It is especially applicable if you are unsure of what your future business needs are, or if you only require certain skills at specific times.
Manage your processes and automate your business Many small businesses don’t immediately prioritise changing their systems and processes as they grow, which often results in inefficiencies and wasted money, time, and resources. For example, when you have a limited number of clients, manually sending invoices and following up on payments is manageable. However, when your client base grows, your accounting administration grows with it. Switching to cloud based accounting software allows you to send invoices on the fly, and automatically issue overdue invoice reminders while also giving you a real-time overview of finances. Having up-to- date access to finances means that you can respond to issues as they arise or even prevent them from occurring at all. As a growing business, you need to ensure that you have processes in place for every possible aspect of your business and automate these processes, wherever possible. In accounting, processes include using the right collection methods, outlining clear payment terms, and automating invoicing and quoting.
Read more from Bandana Jain
Bandana Jain, Executive Contributor Brainz Magazine
Bandana Jain is a Dubai based lifestyle and travel journalist for the past two decades. She’s also a passionate lifestyle blogger, photographer and loves pursuing modelling as a hobby. One of the aspects of her journalistic life that she thoroughly enjoys is rubbing shoulders with Bollywood celebrities. Having said this, her community journalist status ensures that she loves interacting with people from different strata of the society. She loves the limelight on stage sometimes as an anchor, whilst on other occasions as a public speaker. When she is not pursuing any of the above, you can find her shopping in Dubai’s famous malls or chilling by the beach with her favorite cup of tea. Travel is her passion, creativity her morale booster and enriching conversations are enough to give her the necessary thrust in life.