A fundamental concept to understand is that the challenges and strategies involved in starting a business are different to those required to keep it going and see it actually grow. There are several new hurdles that arise with seeing new growth in a company and must be overcome for survival. From inventory management to changing attitudes, let us consider what things you might put in place to guarantee growth through the expansion phase of your business.
Lay the Groundwork
As with any endeavour, it is extremely important to not skimp on the planning step. This is the stage where you research the market to investigate how you fit into it. You may be providing a good product or service but unless you find a point of difference that sets you apart from competitors, growth may not be guaranteed.
Likewise, any new business relationships you enter into need to be investigated fully. If they are customers, do they have a good reputation for paying bills on time and not quibbling over every invoice? If they are suppliers, are they reliable in their service and are they able to expand with you thereby never letting you down? These are all very important questions to consider.
Financial and Inventory Management
It is important with any company to ensure the financial side of things is managed properly. This involves finding methods to increase the cash flow and keep the company away from debt. If financing is required then it is essential to investigate which type of finance would be most beneficial as a large amount of trade debt can cripple a company. Other methods to increase cash flow involve decreasing your debtor days or requesting a deposit upfront from customers.
Inventory stock forms a large proportion of a company’s assets and therefore can also form a large proportion of losses if it is not managed correctly. Obsolete inventory, inventory stock that is expired, and over or underordering is entirely avoidable are key areas to control. Inventory management software can make this precise level of control so much easier to attain and is recommended over traditional spreadsheets when a company is in the growth phase.
A Change of Attitude
When you embark on the start-up journey, it is important to do your due diligence and research every angle. You need to have control over all the eventualities and ensure the fledgling company can recover or adapt to any setbacks. However, by the time you encounter the growth stage, it is time to start loosening the reigns. Your expertly picked management team should start to take over the day-to-day running of things with you delegating your previous responsibilities appropriately. At this point, it is important to adopt a change of attitude where you are more concerned with the big decisions, being open-minded and innovative in staying one-step ahead of the competition and solving clients’ problems which they did not even realise existed.
This change in attitude also involves a degree of humility to accept that there may be staff or industry experts who know or can do things better than you. This is not a discredit to you but companies tend to grow and be stronger when management and directors accept outside help humbly.
In line with this also comes the notion that just because you are successful today, does not mean that success is guaranteed without continued hard work and commitment. Ditch the complacency and ensure that every day, the company sets out to be the best and most-hardworking.
Although we have only highlighted three areas to consider when growing your business, they form a strong foundation for a thriving business. Although attitude and planning are culture-changing initiatives that must be instigated from management, inventory management and financial control can be made easier with the acceptance of outside help.