How to Manage Expansion and Scale Successfully
Business growth can be a double-edged sword. It is so exciting watching your growth strategies start to bear fruit. The exhilaration of knowing that you are finally moving in the right direction and the financial pressures you’ve been dealing with may start to ease off. However, scaling your business can see one headache be replaced by another. Often at the same time, you will acquire new staff, need to make process revisions, adapt new technology and need to attend to new business risks – all at the same time. And, like most business leaders, you will learn a lot through this painful process of growth – and promise yourself not to make the same mistakes next time!
To ensure a smooth transition through business growth, leaders need to anticipate upcoming challenges around finance, culture, structure, leadership and internal operations. It is very easy to get lost in heady exhilaration of growth, and not realise that there are many things you didn’t plan for, like the need for human resources, additional processes and procedures, policies, working conditions, departmental boundaries and corporate culture. And sadly, these things can start to become unruly and will need to be addressed for the greater good. As a leader or manager, you need to be prepared for the onslaught of extra responsibilities that accompany growth and put in place plans and strategies that will facilitate positive and successful growth.
Ideally you will plan for change before you start to see growth but if you haven’t, we recommend you focus strongly on these four key elements whilst on growth mode:
As your business starts to acquire new clients and customers and a greater volume of sales, your profit will undoubtably rise. However, this change will require a greater investment in resources to support the new workload and it won’t just be people. Your new resource structure may require more stock, inventory, technology or digital services and marketing to keep feeding the machine. And as the factory floor gets busier, as a leader you will require more support and possibly a larger leadership team. You will find yourself needing more staff, infrastructure and physical space and you may even grow into new countries, cities or states. To support this new structure, payroll, rent and property-related expenses will increase and on it goes…
This is the time to consider automated finance platforms that can manage larger volumes of costs with deeper processes, more robust payment gateways and improved reporting.
These are risks that can be significantly mitigated with planning. The increase in transactions together with increased reporting and governance requirements add complexity to your financial processes and the skills you will need to manage your business – which will need to be defined and accompanies by a sound plan for re-structure. Once you agree on the plan (tech, resources, structure, processes, policies and procedures), it will require execution time. This will also come at a cost, which should be factored into your forecasts for growth. However, if done right, the additional expense will be well worth your time.
Maintaining your culture during growth.
When you are small it is so easy to maintain your company culture. As you grow and attract new talent to the business its not so easy. At points in your growth your once friendly, relaxed atmosphere may become rife with toxic people and a myriad of conjecture on the kind of people we need here.
Corporate culture needs to be top of mind during growth. As new employees come on board, your company culture will change and sometimes be lost, leaving employees feeling unengaged and unsatisfied. Employees may then resent your aspirations for growth (it may appear to be commercially driven) and stop supporting your vision.
For this reason, it’s critical to ensure your growth objectives don’t overshadow your employees. From the outset make the time to communicate the vision and make everyone responsible for achieving your strategic goals. Make sure your company values are documented and visible to all (office posters are a great way of keeping company culture clear and top of mind). Make your value statements easy to read and recite (e.g. better together, keep the complex simple, etc, etc ). Make an effort to communicate progress to target and use this opportunity to communicate the valuable work employees are doing to help achieve the company’s strategic goals, ending with an appreciation ‘shout out’ for staff that are living the values.
It’s important that corporate culture remains steady so as to ensure you don’t lose the very people that made growth possible. Of course, as businesses expand, company culture can morph for the better, with new values and goals motivating the team.
Put in place a strong, cooperative and cohesive leadership team.
Growth results in new needs for excellence. No longer can one person service your increasing number of clients and customers. No longer can one bookkeeper stay on top of the increased volume of receipts, invoices and transactions. No longer can you wear multiple hats and ‘do the doing’. Sadly, this is where many failures to scale occur.
As your business grows it will require more staff in niche areas, which will result in the need for a new internal structure. This is the time to sit down and map out how your business will work through growth. It’s worth considering separate departments to manage key aspects of the supply chain and supporting functions. Then consider the leaders you will need to hire. They need to be more experienced in their niche areas than you – capable of managing their part of the growth strategy, people, culture, tech and process. This new organizational structure will also require a chain of command, relieving you from the pressures of being accountable for everybody and everything.
The new structure should aim to ensure the business operates efficiently – with dedicated staff and leadership in areas that support your clients/customers and vendors. Your leadership team must be capable of managing the day to day as well we the strategic. They must be your ultimate line of defense, providing quality assurance, error handling and keeping employees motivated and engaged, to best support the company as it expands.
Invest in the right tech and fine tune it continuously.
I once interviewed a customer service representative who had the pleasure of educating me on the 90-minute process for closing e very sale. As a result, he could only close 5 sales a day. Why? A. the tech wasn’t fit for purpose and B. the tech had been bastardised by well-meaning managers who continually added more and more to the process, in order to prove how clever they were. The result was an unruly process that was infuriating for staff and a horrible customer experience.
Growing companies need to a) ensure they are using the right technology that supports the level of complexity efficiently and b) understand that tech needs to be fine-tuned as often as your processes change. Automated and streamlined systems will ensure staff can stop and have a friendly engaging chat with your customers rather than copying and pasting from this system to that spreadsheet before typing an email – just to start the sale process. Appropriate systems will reduce manual labour and save you money – yes, save you money – by putting you in a position where you don’t need to hire people to perform menial, manual tasks (i.e. data entry, scanning, automated email responses, scanning/sending invoices, processing receipts, onboarding new clients, etc. etc.). Instead you can hire people to perform the work computers can’t do (yet!) like caring and building rapport with your clients and customers.
Similarly, as you take on more clients and the energy and activity in your office increases, you will need to send employees on business travel trips to meet and greet new clients or scope out potential areas for future growth. In today’s digital economy, it is imperative that your team can do their job from any corner of the earth – to the same level of quality as if they were in the office.
This will require that they can:
- Communicate from anywhere at any time
- Process sales from anywhere at any time
- Trouble shoot anywhere at any time
This will require that they can access documents, information, travel and access finance systems and resources through accessible, online apps on all their devices – anytime. You should already be aware of how tech plays a critical role in your success. If you already know this, know that your investment will increase in direct proportion with your growth projections. If not, seek out the technical education you need.
Growth is awesome and something to be proud of. As we tell our clients regularly, when your tax bill increases, take it as s compliment – it means your earnings are increasing too. But you need to be prepared for scale or be prepared to fail. Scaling up requires scalability success. Put the needs of your customer and your employee at the center of everything you do. Give them a quality service, with a quality supply chain managed by quality people – to ensure your growth plans not only meet but exceed your expectations.
If you have any questions or need advice and clarity specific to your business, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation.