Reality Check: Is Your Business Ready For Growth? - Digital Hints

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Reality Check: Is Your Business Ready For Growth?

Monday, June 19, 2017

/ by Nurdin Budi Mustofa
As an entrepreneur, your head will be full of ideas of how to grow your business as fast as possible. But if you make a decision to go for expansion too soon, it can have a devastating effect on your business. So, before you start putting your grand plans into action, make sure you have the ability to handle it - here are some tips on everything you should have in place, first.

Reality Check: Is Your Business Ready For Growth?

You enjoy high levels of customer loyalty

To grow anything in life, you need a strong foundation. Regarding your business dealings, this means a loyal client base you can rely on: people that are satisfied with your products and services, and that keep returning to you for more.

Demand is increasing consistently

Get a sudden rush of orders? If so, congratulations - but this isn’t an indication you should make a sudden rush for expansion, too. There could be a variety of reasons why you have enjoyed this healthy boost in profits and sales, but unless it continues for an extended period, you have to be careful. The danger is that you decide to hire a whole bunch of new employees to help you deal with the high demand, only for sales to drop off. And then you will be left with a lot of staff on your books who need to be paid, regardless of whether you have the money to do so. Instead, look to hire third party contractors to help with the extra workload, until it makes financial sense to bring people on full-time.

You have a flexible operational foundation

Similarly, you have to have the right systems in place to handle the extra workload. That means a flexible relationship with your suppliers that allows you to order what you need when you need it. You also might need to have the help of an IT services company who can handle the impact on your databases and IT systems. Unfortunately, businesses that are run by the seat of their pants are unlikely to make a success of growth - you absolutely must have the operational functionality before you even consider expansion.

Reality Check: Is Your Business Ready For Growth?

You have a strong team

It’s one thing having a team in place to start a business, but you need a different set of skills to turn a small startup into a successful, large company. Your employees will need to be able to handle the extra work, as well as being able to meet the new demands and challenges that come with working for large companies. For example, you might have to rely on a trusted member of staff to take over the reins at a new location, or to handle a big customer account on your behalf.

You have strong, positive cash flow

Finally, cash flow is king for every business. Without a strong financial foundation, it’s going to be impossible to grow your business successfully or strategically. Make sure you are matching the increase in orders by ensuring you are getting paid on time and managing your cash flow properly.

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