Your Company Is Growing Fast. 7 Tips on How to Keep Growing
Documented processes and an efficient, scalable workflow are indispensable prerequisites for growth.
After years of hard work, your efforts are finally paying off, and your company is growing fast.
Congratulations! Take a moment and be proud of your success. It's a significant achievement that few small businesses ever achieve.
As your company transitions from a startup with few customer transactions to a small and then mid-sized business, you might ponder how to keep growing without becoming a victim of your own success.
7 Tips on How to Keep Growing
Scaling up your business is not an easy task. The processes you followed as a startup - if you had any - are often too complex if you need to process thousands of orders instead of a few hundred. And complexity can cost you a lot of money. So much so that it can be the difference between turning a profit or a loss.
Small transactional inefficiencies are hardly noticeable financially as a startup because you have only a few orders. But with each additional order, you have to spend more time and ultimately more money to deal with these problems until they become a substantial financial drain on your business.
The following seven tips help keep complexity low and your customers, employees, and investors happy.
Tip 1: Create Products and Services That Maximize Your Profits
Which is worth more: $5,000 in sales with $1,000 profit or $3,000 in sales with $2,000 profit?
All else being equal, the answer would be $3,000 in sales with $2,000 profit because the margin is 67% compared to 20%.
Many fast-growing companies increase their sales much quicker than their profits, leading to a lot of transactions and organizational complexity but little return.
Instead, grow profitably. By putting profits over sales, you'll avoid pursuing low-margin opportunities and focus on creating products and services that increase overall profitability.
Why Margins Matter More Than Revenues: High-revenue orders tend to be more complex and therefore require additional staff to deal with problems as soon as they arise, reducing their profitability.
Tip 2: Look for Business Opportunities That You Can Handle With Your Core Process(es)
Adding a physical store location to an online-only business, for example, would introduce a new set of processes with staffing requirements and, therefore, a higher level of complexity and cost. Instead of running one process, you would need to run two.
In this example, unless you are looking to substantially increase your company's bottom line by launching a physical store location, it may be better to pursue opportunities that you can fulfill online.
When your company grows, you will inevitably come across many new business opportunities. Instead of considering them unquestioned, focus on those you can handle with your existing processes. That way, you'll keep your cost structure low while increasing profitability.
How Shopify POS Can Simplify Your Business: Shopify POS is an application for your smartphone or tablet that allows you to run your physical store on the same platform as your online Shopify store saving you time and money.
Tip 3: Invest in Your Employees
Your employees are what keep your business running. They work with your customers and deliver your products and services.
The better they perform their task, the more successful your company will be.
Trust your employees and give them some leeway to make the right customer decisions.
However, that doesn't mean giving your employees carte blanche. Rules are fine as long they don't impede your employees' ability to serve customers well.
Invest in your employees, both financially and educationally, so that they can grow in their jobs together with your company.
Invest in Your Employees: To create a high-performance work culture, you should follow 10 dos and avoid 5 don'ts.
Tip 4: Focus on Customer Experience & retention
One of the pitfalls some fast-growing companies fall into is assuming the top-notch customer experience can keep up with the top-line growth. Often it does not.
A deteriorating customer experience often spells the end of the boom times as loyal customers move to competitors. Is it reversible? Yes, but reversing this trend can be expensive and depends on how severe the loss of customers is.
It is better to pay attention to customer feedback and constructive criticism to make course corrections early when you still have time.
How Do You Stay in Contact With Your Past Customers? Keeping in touch with your past customers can be as simple as emailing them a regular newsletter with promotions, event invitations, or valuable tips. But you have several other options.
Reward Loyal Customers Without Spending Anything! Discounts are the most expensive way to thank your loyal customers. Instead, consider rewards that are very effective but do not cost you anything. Here are 10 ideas.
Tip 5: Continue Spending on Marketing
Years ago, marketing spend was often limited to brochures, advertising in newspapers and magazines, and large-scale conferences, things you could cut back on or delay if you needed to reduce costs in the short term.
However, in today's social media-centric world, much of the marketing spend has moved online and primarily consists of maintaining your social media presence.
Growing your audience is a lot of work, but retaining your audience is just as expensive. And your audience will quickly notice if you cut back and slow down, posting every other day instead of daily or using more stock photos instead of your own images.
Why You Should Rethink Your Social Media Strategy: Success as a business on social media requires a long-term commitment to post high-quality content daily. But your target audience also needs to be familiar with the type of products and services you offer.
Tip 6: Adopt Technologies That Can Scale With You
As word of your business's success spreads, you will receive many suggestions from investors, employees, friends, and vendors, as to which technology you should adopt. Just click Subscribe, and you will add a new software package to your business. It's that simple. Unfortunately, you will have to spend time configuring this software or hire somebody to do it for you. You also need to arrange for ongoing maintenance.
While all of this is solvable, many entrepreneurs overlook one crucial aspect: how scalable is this software package? Can it grow with you in terms of headcount, transactions, or business models, or do you need to adopt a different software platform when you exceed certain limits? Even if these limits seem far away today, a fast-growing company can reach them in only a few years.
It would be less disruptive and cheaper in the long run to find a flexible and scalable software package rather than just an inexpensive one.
7 Criteria for Selecting Software: Consider these 7 criteria the next time you select new software or an app. They could make your decision more future-proof, saving you time and money.
Tip 7: Know Your Finances
Not knowing your finances every month might be excusable when you are a startup. You probably have other things on your mind than bookkeeping. However, a lack of financial transparency is downright dangerous when your company is growing rapidly. It's like flying blind at night without knowing your altitude, speed, and direction. I admit monthly financial reviews are not a crowd-pleaser. But without them, your company might not make it over the first hill.
5 Reasons Why Knowing Your Profit Is Crucial for Your Company’s Success: Profit is the most straightforward metric that will bring financial transparency to your business and allow you to uncover long-hidden underperformance.
Don’t Be Afraid of Your Finances: If you are afraid of your finances or get quickly bored looking at them, here is why you should embrace them.
Final Thoughts
As a company grows and moves beyond the free-wheeling nature of a startup, it becomes more organized, structured, and predictable.
Documented processes and an efficient, scalable workflow are indispensable prerequisites for growth, not avoidable byproducts.
After all, even for the most experienced entrepreneur, there is always an opportunity to learn a few new tricks.
