Every business owner starts out with high hopes for their new enterprise. They hope their new business will be profitable. They hope that their customers will value the products and services they have to offer. They hope that they will make smart decisions as their business grows.
That last part can be particularly challenging. Managing growth can be difficult even for mature and highly successful businesses, and there are plenty of pitfalls to avoid along the way. If you want your business to succeed for the long-term, you need to help it develop in a smart and sustainable way. Here are four tips you can use to manage the growing pains of your business.
1. Hire Strategically
Hiring is always a difficult process, and it becomes even more of a challenge when the business starts to grow. As your operations become more successful and the amount of business you generate starts to increase, it may no longer be possible to handle everything on your own. You need to hire, but you need to do it in a smart and deliberate manner.
It can be tempting to hire too fast during the growth phase of the business, but a slow and steady approach to increasing headcount is generally the best way to manage. Think carefully about the specific places where you need help and seek out those skills in the people you hire. A bad hire can do enormous damage to your business, so caution should be the watchword.
2. Maintain Your Focus
The growth phase of your business is no time to lose focus on the things that helped you achieve that success in the first place. Even as you grow and add new products and services, you should not lose sight of the things that your customers value most.
You can achieve growth by adding customers, but it is generally more cost-effective to sell more to your existing customers. If you lose your focus and fail to please your existing customers, you could find your current growth course reversing rapidly.
3. Find the Right Financing
The right financing can make or break your business, and nowhere is flexible financing more important than during periods of rapid growth. Hopefully, you already have sources of financing established, and working with your existing lenders is the best way to bring you through the growth phase.
If you do not already have financing lined up, it is important to find a flexible source of capital. Cash flow is essential for businesses in their growth phase, and the ability to borrow only the amount you need can lower your costs and help you focus on your daily operations.
4. Watch Your Inventory Levels
Managing inventory levels can be somewhat of a balancing act for businesses in their growth phase. Having more orders than you can fill may seem like a good thing, but not if you are unable to satisfy that demand in a timely manner.
As your business grows and the orders start to roll in, you do not want to get caught with a shortage of raw materials or finished products. At the same time, you do not want to end up with a warehouse full of unsold items. It can take some time to get this balancing act right, and that dance is an integral part of managing your company’s growth.
Starting a new business is always a gamble, and just making it to the growth phase is a major accomplishment. As your business moves from the startup phase and starts to grow, how you manage that growth can make a huge difference in your future. Learning how to manage growth effectively is a vital part of success in the business world, and the tips listed above can help you do just that.
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Whether your business is thriving and you can’t keep up, or you are waiting on clients to pay their invoices, Universal Funding can help your growing company. Call us at 855.851.7416 or complete our rate form today to learn more about invoice factoring and how it can improve your company’s cash flow.
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Universal Funding is a private funding source that has funded thousands of businesses and more than $2 billion since 1998. We turn your accounts receivable into the funding you need through invoice factoring and can have capital in your hands in a matter of days.