Avoiding business growing pains – Plans & strategies
Key points in this article
- Conduct market research to get a good sense of demand
- Contract or temporary staff might be considered when demand is inconsistent
- Plan ahead for future challenges
Recognising growing pains
As your business grows, are you finding your people and systems struggling to cope with the extra workload? As you run to keep up with booming sales, do you find yourself hoping that the next phone call isn’t another order?
Can you meet demand?
First and foremost, you don’t want your customers going to the competition because you can’t meet their demands.
Try and refine your demand forecasts early on, perhaps by conducting some market research to give you a good idea of the demand for your products or services, and whether competitors are offering something similar.
Market research can give your business an idea of what products or services may be profitable.
A common mistake for newer businesses is to order too much stock in the anticipation of a rise in orders.
By having a good relationship with your supplier you may be able to cut down the delivery time needed to get your supplies. This would mean that you can simply order stock as needed without fear of delay.
Slow-to-pay customers can leave you in the lurch if you’ve used a chunk of your capital to pay supplier invoices.
This too can be solved by good working relationships with both your suppliers and customers – for example, can you ask customers for a deposit up front, or tighten up your invoicing and payment systems?
With a sudden surge in orders, is your small workforce overcome by the extra workload? Or perhaps when sales pick up you take on extra staff – only to find your employees are idle when sales dip again.
To maintain business growth when demand is inconsistent, the key is to try your best to keep customers, even if it means less profit. Try making clever use of contract or temporary workers to handle anything your staff can’t. Or by contracting new employees to projects, you have a choice to keep them on or let them go once a project is finished.
Think outside the square when it comes to staffing – these days contract workers can easily be hired for specific tasks via the web
Did you invest in new equipment to handle new work, but now some machines are standing idle?
When expanding, consider flexible equipment leasing options, for example on a monthly basis so you can more closely match supply to fluctuating demand.
Outgrowing your premises
Does your growing business mean you’re starting to be pushed for space?
Moving to a new location is something that can’t really be rushed. In the meantime you can:
- ask other businesses if you can rent space on a short term lease
- deliver orders more promptly to free up storage space.
It’s likely your business will go through some, if not all, of these growing pains. So no matter how stressful they may appear, it’s best to plan ahead with them in mind. Remember to talk to your employees and advisors regularly for ways to tackle these new challenges.
Planning ahead is a key ingredient for building a successful business
With such rapid growth and change, you may want to have a hand in everything that’s going on – but with so much happening there’s a good chance you’ll miss something. Learn to delegate the right work to others while keeping the critical decisions for yourself.
Lack of capital
All these plans for expansion cost money. Having a good handle on your financial affairs means that you’ll know exactly how much you can expect to invest without borrowing.