You’d be hard pressed to find a startup that isn’t laser-focused on growth. Whether you’re bootstrapped or funded by investors, it’s incredibly gratifying when you start seeing the explosive growth you’ve been working toward.
As the leader of a company that has grown rather quickly, I was initially amazed at its success. However, I realized that unprepared growth comes at a high cost.
Growth has the tendency to expose the flaws internal to your company. For example, if you’re understaffed and you start growing too quickly, then you could underserve your customers. If your product is defective and you begin growing, then the exposure could irreparably damage your brand. If your processes for hiring are weak, then you could bring on new employees who don’t fit your culture or don’t add value.
With that in mind, here are four important things that successful startups do to get ready for a period of rapid growth. You can leverage these tips to improve — and better prepare for — your own rate of growth.
1. They have solid internal processes in place. One of the most important factors in how quickly your startup grows is the company’s maturity. Your company must be internally stable and organized enough to handle your external demand for growth. This includes properly recruiting and training employees, establishing and updating processes when they need to evolve and making sure you collect data correctly.
2. They regularly assess the business’s holistic financial health. There’s more to growing a business than focusing solely on operational needs. All aspects of a business can cost a lot quickly if their health is not assessed and adjusted often enough.
Businesses should have a financial model that allows them to explore different scenarios of what might happen in case of a hiccup with one of their existing solutions. Some important things to look at when you’re growing include the cost of acquisition in sales/marketing, sales risks (defaults on orders, refunds, returns, etc.), the capacity of your current sourcing solution, your overall customer experience and your retention rates.
3. They deal with internal challenges before pushing for growth. Imagine you have an extremely important and busy week, but you are stuck in bed with a high fever. As much as you want to push through and work, there’s really nothing you can do but get better and address your to-do list when you’re healthy again.
The same applies to business growth. Growth can be devastating if not handled correctly. For instance, if your product is popular but defective, more immediate demand for it can be destructive to your business and its reputation.
Sometimes, you need to sacrifice some short-term growth to focus on long-term internal challenges. This may mean expanding your internal team, building or automating new processes or reallocating financial resources. Once you’ve addressed your internal issues, you can liberate space for more growth.
4. They don’t take shortcuts. I advise founders to ask themselves if they feel they are taking shortcuts anywhere in their business to address that high growth. These could be in human resources, sales, marketing, management, operations, admin, finance, etc. If they do identify any areas where they’ve cut corners, they should fix these problems immediately, so they don’t threaten the business in the future. Remember, any shortcut you make to save time early on, you’ll have to pay for many times over during high-growth times.
If you’re unsure of whether you’re ready to handle rapid growth, you may want to speak with a mentor, an advisor or another successful entrepreneur to help you assess your internal preparedness.Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Original Source:
https://www.forbes.com/sites/forbesfinancecouncil/2019/06/19/ready-to-grow-four-preparation-secrets-of-high-growth-startups/
