As a startup, there are many factors that will gather momentum as your business grows. Controlling growth and expansion is key to continued success of your business. However, you may become aware that growth seems to have spiralled out of control.
When this is the case, you need to reclaim your business by once again placing yourself firmly back in the driving seat – and this is how to do it.
Step 1 – Invest in the Now and the Future.
The first step is not so much about putting the brakes on, but about understanding the direction your business is travelling. Is it, for example, expanding in the markets identified in your business plan? If it isn’t, it may be that the equipment and machinery you have invested in will be obsolete within months.
Financially, this could be a disaster and operationally, it could render your business dead in its tracks. By taking on flexible Lease Corp heavy equipment financing, for example, you can be confident your business has the right financial backing to invest in the machinery and equipment you need now and in the future too.
Step 2 – Complete a Growth Diagnosis.
Dissonance suggests that there is disharmony and this means that certain aspects of your business are grating against each other. This creates tensions, with different departments and factors working against each other, rather than dovetailing together. Business growth will lead to tension becoming untenable. By completing a growth diagnosis, you can forecast not only how quickly your business is expected to grow but also in which direction and why.
Step 3 – Prepare a Growth Strategy.
With the right machinery and equipment to continue with operations and information from the growth diagnosis, you need to strategize the development of the business and its growth. You need to keep control of business growth because unfettered, uncontrollable expansion causes the strands of your business plan to unravel.
What do you need to maintain this growth? Is the pace of expansion sustainable or will it slow? When it slows how will this decrease in growth affect the business in its new state? What needs to change and what needs to stay the same?
Step 4 – Forecast cashflow.
Unravelling strands of a business can be akin to a vessel floating on the sea and no one at the helm. But the biggest danger is the effect of this expansion on cash flow.
Essentially the lifeblood of your business, expansion can mean heavy investment, from leasing new equipment to underwriting contracts until payments are made. Too many investments and leasing agreements but not enough of your invoices being paid lead to cashflow drying up. Non-payment to suppliers can lead debt that will soon spiral out of control. To avoid this, forecast cashflow for the period you expect this growth to last. Will bills still be paid or will you need a cash injection?
Step 5 – Control Costs and Debts.
With the right equipment and a strategy for the period of expansion, as well as forecasting costs and debt, you now need to make strident moves to control both costs and debt. When a business grows at a rapid pace or faces a period of short, sharp expansion, there is no compensation for calling on the services of a credit controller or accountant. By keeping detailed tabs on the cash now, you will reap the rewards later.
Step 6 – Keep Your Customers Happy.
After all, it is the demand for your product or service that is the driving force behind this period of growth, and keeping your customers happy is key to continued success. Not meeting customer expectations not only stunts growth but could stop it in its tracks.
Controlling your business means controlling growth.
Letting it run away with you will spell disaster. Do you have a strategy to stop things getting out of control? If not, you may well want to think about getting one.