Growth is one of the goals of every entrepreneur and business owner. When you start your own business, you most likely have a clear idea of how far and successful you want the company to be – and how to get there in a timely manner. In recent years, however, there have been many cases of businesses being consumed by their own growth. Rapid growth could easily lead to degrading service quality, inability to operate efficiently, and other big issues that threaten the existence of the business.
Rapid growth should never be your primary objective. Instead, you need to aim for gradual and sustainable growth. There are a number of key elements that are essential to maintaining sustainable business growth under any circumstance, and we are going to review them in this article.
Many startups and businesses make the mistake of forgetting about efficiency altogether after receiving a big round of investments or enjoying a boost in revenue. These businesses then allocated the available funds towards bigger, flashier offices and other unnecessary things. Doing so without maintaining operational efficiency is the first step towards ruining the business from within.
Sure, you can move to a bigger office with a better working environment. No one can stop you from providing employees with an exercise room and better facilities too. Before investing in these things, however, you need to review ways to maintain a high level of efficiency.
With a bigger office, team members may have difficulties communicating with each other. The extra facilities added to the working environment may also act as distractions that lower efficiency. Before you know it, team members no longer have the mindset needed to maintain a positive workplace culture, streamlined operations and communications, and sensitivity to costs.
Simple measures taken before making such investments can help prevent the decline of operational efficiency and future problems. Always focus on investments that can improve the business as a whole and maintain the right organizational values throughout the growth.
An Updated Budget
Businesses, especially tech startups, set their operational budget at the beginning of the fiscal year. They then use that budget as a guideline. The same budget that prevents the business from spending too much and banking losses could also cause problems as the size of the business’s operations grows.
To have a sustainable growth, you need to evaluate your company’s finances more frequently. A review every three to six months is ideal, especially when you’re dealing with rapid growth that requires a lot of big investment. Don’t hesitate to make necessary changes to the predetermined budget.
You also need to make sure that business operations are sufficiently financed. A lot of businesses who were unable to keep up with growing demand failed because they didn’t anticipate that jump in demand in the first place. Bigger orders mean more financing is needed too.
Of course, there is no shortage of options when it comes to financing. Small and medium enterprises can rely on conventional, mid- to long-term secured loans like affordable home equity loans to keep costs down. Project-based financing and invoice factoring are also financing options worth considering.
Man the Posts
The third and perhaps the most important element of sustainable growth is human resources or HR. A company can only go as far as its key figures will take it. You can’t expect to sustain growth, especially when dealing with increasing demands and a growing market in general, without recruiting competent people to fill key positions across the board.
Hiring new employees is only a part of the solution. Aside from recruiting new people, it is also necessary to invest in existing team members. Training programs that help grow employees’ skills are essential. Employees who have been with the company longer are more likely to perform and stick to the company’s values when promoted to important positions.
There are also ways to fill HR gaps without adding new members to the team. Outsourcing is a worthy option to consider, particularly for certain parts of the business’s operations. You can easily outsource manufacturing and distribution to third-party contractors.
The trickiest part of growing a team along with the business is deciding when to recruit new team members. You don’t want to stretch existing employees, but you also want to avoid the extra overhead costs that come with recruiting new employees. Current employees are actually great indicators to observe in this case; when they start complaining about having too many things to do, it may be a good time to expand the team along with the business.
With these three elements in place and managed properly, sustainable growth will not be a difficult goal to achieve. Many business owners have taken their companies to incredible heights gradually and sustainably. You can too.