Ask questions about growth
June 01, 2014
The dream of every business owner is for business to be able to expand, but when your business grows from day to night it can be scary.
Like children, when they grow and suddenly no clothes fit them, you feel overwhelmed by the idea of what you could do to fulfill all the needs of your growing child/business.
The current market environment San Angelo and nearby towns are experiencing is challenging, fast growth in a short time. Currently small businesses feel pressure to grow too fast to meet clients’ demands and be able to compete in the market. This accelerated growth has created stress in business owners and has driven them to make expansion decisions often without the necessary planning. And, unfortunately, this accelerated growth can jeopardize the business’ future.
Fast-growing businesses all face similar challenges that relate to scaling a business — from cash flow issues to retaining good employees to the temptation to depend on one large client.
I will share an extract from an article written by Edward Hess, a professor of business administration and the Batten Executive-in-Residence at the Darden Graduate School of Business, University of Virginia.
“Growth will stress existing people, processes and controls. Furthermore, growth requires the entrepreneur to fundamentally change: from being just an entrepreneur to becoming an entrepreneur and manager, and ultimately to becoming a manager and leader. Growth fundamentally changes what an entrepreneur does every day and how he or she does it. Most first-time entrepreneurs find those changes difficult. Some find them unpalatable. Many entrepreneurs think that growth is just more of the same. Not so. Growth transforms almost everything in a business.
“These realities can be better managed if one asks these questions: Are we ready to grow? Are the right people, processes and controls in place? What do we need to do to prepare for growth? What are our risks of growth? How will we manage those risks? How much should we grow? What are the early warning signals that we may be growing too much or too quickly?”
In this current competitive environment business owners feel that if they don’t grow fast they will sink, which can be true. However, before we decide to hire more employees or offer new services, we need to take a minute and think about the impact this growth will create in the company’s overhead cost and cash flow to be able to stay afloat.