The true test of any business isn’t necessary how they deal with a lack of customers; it’s how they are ready and able to scale up operations to handle too many customers. It’s often why businesses experiencing rapid growth get themselves in trouble.
Imagine an ice cream store. Suppose it serves the most spectacular amazing ice cream and as the word gets out, more and more people are flocking to their location to give it a try. Imagine it gets so popular that it’s lined up out the door and constantly running out of the top flavors.
Beyond the frustration new customers experience as staff can’t process orders fast enough and that new business is lost because of poor customer service, the too fast demand means that basic administrative functions start slipping.
Maybe even a delivery goes unnoticed leaving previous product to melt and spoil. Perhaps thieves target the frazzled store to help themselves to the cash register. Certainly new staff members will make costly mistakes as they learn the ropes.
Instead of the growth making them additional money, our hapless ice cream store owners find themselves looking at less profit at the end of the month. Tally it up to growing pains, but it’s a serious problem for growing businesses.
Why Solid Systems Can Support Your Business Growth
#1: Finance – Growth means moving from a “Cash in, Cash out” type financial system to a more complex system that includes checks and balances, short-term financing, revenue forecasting and expense controls.
Implement basic financial management systems in your business earlier rather than later. Even something as simple as systematizing invoicing and overdue account reminders will save you cash flow headaches later as your business outgrows the cash model.
#2: Training – Scalability often comes down to the ability to replicate the talent that we as the entrepreneur bring to the business. That’s why hiring the right people and training them properly is so critical.
Document, document, document! Document everything right down to the smallest detail. What is obvious to you has done it a million times before isn’t obvious to the new hire who has to learn the tricks of the trade from the beginning.
#3: Marketing and Sales – Growing your business team means now you are committed to that monthly expense and without enough business coming in the door, you will quickly experience cash flow crunches.
Creating automated marketing and sales systems that not only generate new leads, but help track them will ensure you keep the revenue flowing in. Formalize your lead tracking system so new prospects get the proper follow-up to turn them into clients.
#4: Customer Service – Rapid growth tends to overwhelm customer service capacity very quickly. Nothing is more frustrating for customers than getting lost in the shuffle. That’s why formal Help Ticket tracking systems are worth it.
Centralized tracking means another customer service agent can take over and it stays active until officially closed. Many systems even allow the customer to follow the progress through the system.
#5: Operations – Growing pains are usually the most difficult on the operations side. Scalability is a huge issue, one that can literally cost companies their business if not done correctly.
Ditch those goofy little systems that no one but you understands and implement formal ones. For example, if your business is service-oriented, consider a project management system to track progress and coordinate tasks.
Remember, growth is difficult – the same as it was in your childhood. The key is to prepare for growth by anticipating which systems and processes will fall apart on a larger scale. Chances are the answer is most of them.
2 Comments
Carla, this is an excellent article! Making the move from solo entrepreneur to a business that’s separate and apart from yourself takes a different kind of thinking — and internal processes to match your switched thinking…. – Anita
“Growth means moving from a “Cash in, Cash out” type financial system to a more complex system that includes checks and balances”
YES please! I am a stickler for checks and balances. That is the great thing about bookkeeping…when done properly it should always balance! I find the biggest/most important check and balance you can do as a small company is to have a dedicated business checking/savings account and reconcile it monthly! This assures all incoming and outgoing funds are accounted for and accurate. Easy as that!