7 Tips to Avoid Growing Pains for Businesses in Growth Mode
BY: Bridget K. Krueger
Scaling Up for Success
- Get a good understanding of your financials. You should be able to print off a profit-and-loss balance sheet and explain where you stand with every project at the end of the day. Small business owners usually know how much money they are taking in, but sometimes don’t keep as close a watch on expenses. If bookkeeping is not your strong suit, either invest in some training or pay someone else to do it.
- Make sure you have key employees in place who can take over some of your current job duties. When you’re in growth mode, you will spend less time doing hands-on tasks in the field. You simply won’t be able to do it all yourself anymore. Instead, give yourself more time to train and mentor employees, as well as time to think more strategically about new business. Identify or hire someone you trust to handle core business functions.
- Estimate how much a new employee will cost. Remember to include salary, benefits, health care, taxes, and training time as you figure out the total cost of employment.
- Document processes and establish standard procedures. As you bring more people into your operation, you will need to create job descriptions that outline your expectations for each role. This is also the time to create an employee handbook. You want to be sure that your company culture grows along with your business. Take the necessary steps to get everyone on the same page – including any new hires down the road – to protect your corporate values.
- Support your sales funnel. Where do your customers come from? Does most of your business come from repeat customers or do you need to constantly generate new leads? Are you encouraging referrals? Does all your business come from one or two sources/customers? You may want to diversify your customer base to protect yourself from losing half your business all at once if a main source of revenue dries up.
- Create a contingency plan for a downturn. We recommend that you don’t overextend your finances in order to grow or expand. An unexpected dip in the economy, like the impact of COVID-19, can slow down new business. A major weather event might dry up access to raw materials. What’s your plan for a rainy day? You should have some back-up savings or an available line of credit to cover the things you can’t plan for.
- Define your goals for growth. Develop a plan or vision for the next 5-10 years detailing any vulnerabilities that could change your strategic direction. Create projections and establish benchmarks for taking stock of progress. It’s much easier to make the right adjustments if you know whether you are ahead of or behind schedule.
Expert Advice at Your Fingertips
- SCORE stands for Service Corps of Retired Executives. As a resource partner of the U.S. Small Business Administration, SCORE matches entrepreneurs with a mentor advisor to provide free business guidance.
- The Wisconsin Small Business Development Center at UW-Madison provides no-cost consulting and non-credit courses to help businesses from start-up through growth.
- Tap into professional business partners, like your accountant, attorney, and business banker, for expert help with key aspects of understanding and growing your company.