As the owner of a fledgling business, you may dream of customers lining up at your door, ever-increasing orders flowing from your website, and sales going through the roof. But when sales skyrocket, you may get distracted and begin to confuse short-term surges in revenue with long-term profitability. Although sales growth is one factor that distinguishes a vibrant company from peers, rapidly increasing sales can capsize a business that isn’t adequately prepared. If your company is entering a phase of brisk and perhaps unexpected growth, be aware of the risks.
- Staff struggles. As the demand for products and services grows, you may ask existing employees to work harder and longer. Some may begin to feel dissatisfied and stressed, which can result in escalating turnover. If remaining employees are asked to take up the slack for former colleagues, quality may suffer. Although hiring more staff is one solution, it’s crucial to hire carefully. Be sure the employees you bring onboard have the right mix of skills and experience. Through careful interviewing and research, find employees who fit your company culture and can work well with your existing team. Adding more people doesn’t automatically translate into more productive operations.
- Customers first. When sales climb sharply, take care to not neglect existing customers. Otherwise, the customer service reputation that built your company may deteriorate. Don’t give the people who have remained loyal to your company a reason to leave.
- Accounting matters. If you’re managing a small company, a pad of paper and a simple spreadsheet may suffice to keep tabs on income, expenses, and profit. As the company grows, however, accounting transactions tend to become more complex. Installing a robust accounting system and seeking professional advice can keep your business on track during periods of rapid growth.
- Stay focused. When revenues increase sharply, concentrate on your core values and mission. Keep current strategies in sync with your overall vision. Review your organizational structure, marketing plans, and supplier relationships regularly to avoid the trap of crisis management. Keep your banker in the loop to ensure that cash flows remain stable.
If your business is growing faster than expected, give us a call. We’re here to help.