Dec 142011

Beware of growing pains as your business takes off

It’s a great feeling as business improves and your business starts to grow; you think the struggle for survival is behind you, that everything is fine from here on in and you start to relax.  The next thing you know you’re back to where you started thinking “what happened?”  Running a small business that’s expanding can be complicated but it’s not impossible. Here are a couple of things you need to keep an eye out for:

Over-promising and under-delivering.

When you only had a few customers keeping on top of things and providing that personalized service was easy.  Because you were never running at full capacity that big order with short timescales wasn’t an issue.  However, now you are running hot and there could be a tendency to say “ok” without thinking about the consequences.  Politely saying you can’t do it or agreeing more achievable delivery times will be less damaging that failing to deliver on your promises.

Drop in quality.

Like the above, this generally tends to happen when too much work is taken on with too little time to do it.  Corners end up being cut to achieve the timelines and the next thing you know the customer is returning the work.  The spiral then tightens as you now have re-work on top of everything else.  Growing a business should not mean reducing quality.

The supply chain snaps.

As your business grows you may be putting more pressure on your suppliers.  Although they may not have let you down in the past the likelihood of them doing so now increases.

How are the accounts looking?

Lots of new work so loads of money coming in, right?  Not necessarily unless you keep on top of it; plus, you will now be owing a lot more to your suppliers.  Worst case?  Your customers now owe you 2-3 times what they usually do but refuse to pay you until your quality and delivery come back up to scratch…  See how it all starts to snowball?

The systems aren’t working.

Before you expand you need to have good, tried and tested systems in place.  Otherwise, when it comes to taking on new people you will spend more time teaching them than doing the work.  Systems need to be written down and tested to ensure that even the most complicated processes can be done by the newest team members without the need for extensive supervision.

So how do you avoid the crash?

Keep a good schedule.

It doesn’t matter how you do it but you need a plan that you – and the rest of the team – can see and understand.  The schedule will help you identify when you’re reaching capacity and also help to plan ahead so that you can see when you have to start bringing more work in.  For example, advertising your business usually takes some planning and there is a time lag between placing the ads and receiving the workload.  Only by planning can you smooth out any highs and lows and highlight when the next set of ads needs to go in.

Keep talking.

Talk the your customers, talk to your team.  Keep everyone informed regardless of whether the news is good or bad.  Customers are less likely to be angry if they are informed of delays early and then kept up to date; it helps them to re-plan and it avoids the last minute surprise.

Reflect on what’s happening.

Chose a time – at the end of every day or week, at the end of every job or whenever suits your business best – when you and the team can sit down and quickly run through what went well and what didn’t go so well.  Keep away from blame and focus on how to do it better next time.  Involve the team because they probably have the answers you seek.