Moving into the next stage of business growth can be exciting, but it can also expose weaknesses you’ve been overlooking as a smaller outfit. Your customer base is expanding, you’re adding staff, and things just aren’t as easy as they used to be. What worked with 10 customers and a small team just isn’t going to work with 100 customers and twice the workload.
Processes that used to just ‘work’ are now becoming less efficient. Key staff are swamped and just can’t keep up. Cash flow is getting tighter by the week. And if the owner still has to green-light every major decision, you’re probably going to hit a ceiling very quickly.
That’s why growth and reaching the next stage is more than just finding more customers and getting more sales for your business. You need to make sure you’ve got the financial resources, the right people on board, the systems in place to keep things running smoothly, and the leadership to take you where you want to go next.
Before pursuing that next stage of growth, you should take a hard look at whether your business is up to the task.
Define What Growth Means for Your Business
Growth doesn’t look the same for every company. Before making changes, determine what you are trying to accomplish.
Your next stage of growth might mean:
- Increasing revenue and profitability
- Expanding into a new market or geographic area
- Adding new products or services
- Hiring employees or building out your leadership team
- Acquiring another business
- Opening another location
- Building a business that can operate without your daily involvement
Be specific about where you want the business to go. A clear vision gives you a better foundation for deciding where to invest your time, money, and resources.
Just as important, consider why you want to grow. Bigger isn’t necessarily better if increased revenue also brings higher costs, more complexity, and less profitability.
Take a Hard Look at Where You Are Right Now
Before making decisions about taking your business to the next level, you need to step back and understand where you are today.
Take a close look at your business’s financials, how things are running day-to-day, who’s on board, who you’re selling to, what’s in the pipeline, and how much you can handle. Look for any problems that could come back to haunt you if you start to expand.
Ask yourself:
- Which parts of the business are working well?
- Where are we consistently hitting the same problems?
- What is taking too much time?
- Where are we losing money or being inefficient?
- Do we have the resources to take on more business?
- Are we too reliant on a single customer, employee, supplier, or income stream?
- What still depends too heavily on me as the owner?
Growth tends to make existing problems a lot bigger, so if you can spot what’s going to cause you headaches before you start to grow, you’ve got time to sort them out.
Make Sure the Numbers Support Your Growth Plans
Increasing sales doesn’t automatically mean increasing profits.
Growth often requires an upfront investment. You may need to hire employees, purchase equipment, increase inventory, invest in technology, expand your facility, or increase your marketing budget before the additional revenue arrives.
Develop financial projections based on realistic assumptions. Consider the cost of your growth plan, how you will fund it, and how long it may take to see a return.
Pay particular attention to cash flow. A company can be profitable on paper and still struggle if expenses need to be paid well before customers pay their invoices.
Knowing your numbers helps you determine how quickly you can afford to grow and whether outside financing may be necessary.
Strengthen Your Processes and Systems
Many small businesses operate successfully because experienced employees know what they need to do. But as the company expands, it gets a lot harder for that magic to keep working.
Processes need to become repeatable.
Start by jotting down the procedures that are essential for running your business, especially those involving sales, customer service, billing, operations, and employee responsibilities.
Then look for opportunities to simplify or automate repetitive work.
The goal isn’t to create unnecessary red tape. We’re talking about building systems that help the business grow without bogging it down in confusion.
Systems that make your life easier also make it easier to onboard employees, keep quality consistent, and give people more time to focus on the things that matter.
Build the Right Team
At some point growth just demands you stop doing everything yourself.
Think about the skills and leadership abilities your company is going to need next. You may find you need to bring in some more staff, work on developing the skills of those you already have, outsource tasks that are outside your core competencies, or get some experienced managers in.
You also need to figure out if the people you’ve got are in the right jobs. The staff who were fine when the company was smaller might need some extra training or support as things become more complicated. And there may be jobs around the place that just need a complete shake-up.
Doing some forward thinking on your team requirements before things get desperate makes the whole transition a heck of a lot smoother.
Strengthen Your Communication
As your business moves into its next stage of growth, communication needs to evolve along with it. Informal conversations and quick check-ins may have worked with a smaller team, but they become less effective as you add employees, customers, and layers of responsibility.
Make sure employees understand the company’s goals, priorities, and their role in achieving them. Establish clear ways to share important information, provide feedback, and keep teams aligned. Consistent communication with customers is equally important, especially as more people become involved in sales, service, and support.
Putting effective communication practices in place now can reduce misunderstandings, improve accountability, and help maintain the culture and customer experience that contributed to your success.
Learn to Delegate Effectively
Delegation is going to become a key skill now that your business is growing.
If every little decision needs your approval or customer issues need your personal attention, you’re going to hit a brick wall fast.
Start working out what tasks you can safely hand over to others. Be clear about what you want to see happen, give them the authority and resources to make it happen, and agree on some check-in points.
Delegating doesn’t mean losing control of your business. It means building a company that doesn’t need you to personally fix every single little thing.
That shift also gives you more time to focus on the overall direction, key relationships, and opportunities that can help the business grow.
Understand Where Future Revenue Will Come From
Before you add more capacity, you need a solid plan for how you’re going to generate the business that will support it.
Take a hard, realistic look at your current customers and sales. Not just the numbers, but where the real money is coming from.
- Which customers are the most profitable?
- Which products or services have the greatest potential?
- Where are your best leads coming from?
- Are there opportunities to sell more to existing customers?
You may also need to strengthen your marketing and sales efforts before expanding operations.
Having a steady pipeline of decent, qualified opportunities to work with gives you a lot more confidence when you’re making decisions about bringing on new staff, buying new equipment, and other investments you need for growth.
Protect What You’ve Already Built
As you focus on expansion, keep a clear eye on the foundation of your business. You don’t want to let things fall apart while you’re focusing on new market opportunities.
Rapid growth can often leave customer service, quality control, and employee morale in the dust. Meanwhile, your existing customers may start to feel like they’re no longer the priority because you’re too busy trying to find new ones.
Set some performance targets that keep you on track with both the growth side of things and the health of your existing business.
Keep an eye on customer satisfaction, profitability, employee retention, operational efficiency, and cash flow, not just revenue.
Sustainable growth isn’t about just getting bigger. It’s about getting stronger.
Prepare Yourself for a Different Role
One of the biggest downsides to business growth is how your role will change.
When you first started out, you were probably on the shop floor, rolling up your sleeves to get the job done. You were problem-solving and working with customers one on one. But as the business grows, your responsibilities are going to need to shift.
You’ll probably be spending more time finding and developing your team, crunching numbers, planning the future of the business, and building relationships with other key players. This is a tough transition for many business owners.
The skills you developed to build the business in the first place aren’t always the same skills you need to lead a large organization.
You need to recognize that your role will change, which is key to preparing for growth.
Build a Business That Can Grow Without Creating Chaos
You don’t need to have everything figured out before pursuing growth. But you do need a strong enough foundation to support where you want to go.
Take the time to understand your financial position, strengthen your systems, build your team, and identify the obstacles that could prevent you from reaching the next level.
An experienced business advisor can also provide an outside perspective. When you’re involved in day-to-day operations, it can be hard to see what needs to change or which opportunities deserve your attention.
Preparing your business for its next stage of growth isn’t simply about generating more revenue. It’s about building an organization with the people, processes, financial resources, and leadership needed to grow successfully and sustainably.
Debra Murphy is a marketing coach and consultant helping small businesses navigate the complex maze of online marketing. Experienced across all traditional marketing channels, Debra specializes in organic search and content marketing to help small businesses gain visibility and generate inbound leads. She is also a certified coach in the 90 Day Year® Peak Performance System. Debra regularly writes about small business marketing on her Masterful Marketing blog.
