Growing pains and how to cure them

If you start a growth phase in your business it’s usually because you’ve done something right. A new product or service has been launched, marketing has been effective, the sales are coming in, and you’re delivering efficiently. 

This cycle will continue for a while but as you take on more customers to feed the growth you will at some point reach the limit of your business capacity. You might run out of human power (and end up making mistakes), business resources or the ability to manage operational issues effectively.

Every entrepreneur who has reached this point is facing the same dilemma: is this real growth? Or is it just a short-term spike?

If you hire unwisely, you’ll hurt the business by having excess capacity sitting in the office. If you incorrectly identify growth as a spike, then the business suffers from having stressed employees, lower quality output and even a damaged reputation from failing to deliver. This tricky balance is what makes growth a double-edged sword.

To find this balance, consider three areas when tackling a growth strategy:

1. Systems and processes

With growth you must make sure that the quality of your services is maintained; service quality is, after all, why your customers recommend you.

To do this, you need to start implementing processes within your business. The purpose of any process is to ensure that the same result is achieved; no matter how many times the procedure is repeated. This is particularly useful in service delivery or product assembly, when the same services are sold to multiple clients but must be delivered in the same way.

Having a process-driven business also allows you to measure performance against the processes to check that the process was followed or to record what went wrong. For example, how many widgets were made last week against your target? Or how many installations failed in the last month?

2. Numbers don’t lie

Even when you set up systems, grow management capacity and implement quality control systems, you must always measure. The numbers will tell you where a problem is, where you need additional resources, or where changes are needed before they can adversely affect your business.

For example, your revenue is growing at an incredible rate, but your finance director tells you something isn’t right. On the face of it, sales are excellent, growth is good, and you’ve been hiring, but your hidden expenses have started to outstrip your revenue growth.

This is exactly the type of problem that kills fast growing business, and it’s usually because someone doesn’t understand – or doesn’t want to know – the numbers.

3. Stop interfering

When you grow to the point that you need to hire others to help you manage the business, you have to resist the temptation to circumvent them by going directly to your employees. It doesn’t matter if it is a problem or instructions on how to complete a certain task, stay out of it, or you run the risk of losing your managers, confusing your employees and stifling growth.

Similarly, most entrepreneurs love to micro-manage. It’s hard not to if you’ve started the company from scratch and done every role at some point. Accept that your employees will likely do things differently to you, but if you want your business to grow, then manage the results and not the tasks themselves. Encourage your employees to think on their own and get the results with as little input from you as possible.

Following this advice, while difficult, will free up your time to work on growing the business rather than simply running the business.

David Barker is founder and technical director of 4D Data Centres, which he founded at age 14, and a finalist for the Young Entrepreneur Award at the Growing Business Awards 2012.

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