Growth is something that all businesses aim for. However, you may be startled at just how fast your business has grown.
It can be difficult to manage growth. After all, it is not a case of simply sitting back and smiling as your company progresses. You need to make sure you have the right structure and systems in place to facilitate growth, otherwise, it can feel like you are trying to run before you can walk.
You will find yourself stressed, as you try to manage new orders and demands yet you don’t really have the capacity to do so. With that being said, read on to discover some useful tips on managing rapid business growth.
Define your objectives regarding business growth
There is only one place to begin, and this is with defining your business growth objectives. There are a few key questions you can ask yourself in this regard.
Do you have the required capital in order to finance the growth of your business? Do your employees within the management team have the competencies that are needed to handle business growth? Is your product line efficient? Is your inventory in line with your growth? Are you collecting receivables fast enough? Are you hiring too fast? Are you growing for the sake of it or because you wish to be more profitable? Are you expanding too quickly? Are you managing cash well?
Make sure you answer all of these questions honestly so that you can get a true reflection regarding where your business is at.
Prepare a growth strategy
Another important step when it comes to managing growth is to put together a growth strategy. This will help you to determine the opportunities and risks for your business.
In order to put a strategy together, you will need to look closely at demographics, distribution channels, marketing channels, competitors, the economy, the market, and internal resources.
Your strategy will not only help you to plot your path to the top, but it will help you determine what you need to do in terms of acquiring the right equipment and changing your processes.
The likes of Microsoft Dynamics NAV can help you to manage all of your sales and inventory in one place, growing as your business goes.
A system like this can provide the perfect foundation for business growth, helping you to manage your operations and ensuring your processes are streamlined and effective.
Forecast your financial requirements
The next step is to forecast your requirements with regards to cash. You can do this by doing an assessment of your cash outflow and inflow.
This will give you the platform to decipher what your future cash requirements are. By knowing this, you will be able to evaluate your current financial situation so you can determine what improvements should be made.
You may be able to secure added financing for work capital. Other options include converting unused assets into cash and restructuring your debt.
Assess payables and receivables
In order to manage business growth effectively, you also need to look into your payables and receivables so that you can determine how you can improve any liquidity issues.
To improve how your receivables are managed, there are a number of steps you need to take. Firstly, if you do not already, then you need to start doing credit checks on all of your clients.
You also need to make an effort to resolve problems quickly, as well as using the correct collection methods and having clear payment terms in place.
Take a look at the time that is needed to collect money and take the just means for accounts that are substantially overdue, for example, you could freeze them.
If your cash flow is being impacted because of your credit policy, look to see whether there are any ways you can reduce your collection time. Once you have done this, you should then apply the same sort of logic in terms of assessing your payables.
All in all, hopefully, you now have a better understanding regarding the steps you should take in order to manage business growth. If you follow the advice that has been provided, you will have a step-by-step and proactive approach that can make fast business growth a lot more manageable and ensure that you have complete control of the situation.