Businesses that are run successfully experience phases of growth. Most small businesses have growth and scaling goals from the get go. Of course, if a business is undergoing a period of growth, this is a big plus. However, growth is not unlimited. Small businesses grow until it reaches a certain capacity. It should be well managed because otherwise growth could reach a point where a small company’s resources are not sufficient to manage it. Overgrowth can have as devastating consequences as undergrowth. So, here are several tried and tested tips for small businesses to manage growth:
Have a monitoring system in place
Managing growth is all about making sure a small business has adequate resources to meet customer demand. Business owners usually don’t know if the company is in good shape to handle the rate of growth. This is where a highly effective monitoring system comes in. The business owner may not always be able to keep an eye on how the company is growing. This usually falls on the hands of the managers. However, managers can be overwhelmed by other things. Therefore, business experts strongly suggest companies to have a monitoring system in place to make sure customer demands are being met properly.
Analyze performance data
In addition to the monitoring system above, or as a part of it, businesses should rely on performance data. This means knowing how many products were made last month, how many were actually sold, and the original target goal. This data will indicate the growth trajectory of the small business. Constantly gathering this data and analyzing it will help small businesses prepare to meet growth goals better.
Some small business owners have this terrible habit of micromanaging and getting in the way of managers. When a company reaches a certain growth point, it’s not uncommon for the executives to get in the way of managers. However, veteran business owners like John Burgess strongly advise against tactics like this. The best way to manage growth without it getting out of hand is to let managers do their job. Founders should get out of the way and instead focus on making the workplace more efficient. Of course, if a manager is doing a bad job, the owner could intervene. But first think carefully whether the manager is actually doing a bad job.
Do have growth goals
One of the more effective strategies to keep the growth rate from getting out of hand is to have goals. Unlimited and unrestrained growth is a surefire way for a small business to implode. Therefore, set growth goals based on the data regarding the company’s capacity. Formulate sales and marketing strategies keeping these growth goals in mind. This should be able to keep the growth rate at an ideal level without going over or under.
There is no method that suits all for managing growth. However, small businesses should always be aware of growth goals and real-life growth rate. It should never underperform, but it should not reach beyond a company’s capacity to handle it. The above suggestions will help small businesses manage growth in a manner that leads to long-term success.