Rapid business growth is every business owner’s dream; however, fast growth can turn into a nightmare and take a business under if not managed carefully. Having worked with companies named as some of the fastest-growing companies in America by Inc. magazine, we at ThriveVance have firsthand experience helping CEOs navigate rapid growth and the challenges that come along with it.
To prepare, executives must develop a plan for scaled growth, including a list top challenges at each given stage to ensure that the organization is focused on the right things. In addition, they must establish accountabilities and identify a timeline with milestones to achieve along the way. This plan ensures that as the company grows, stakeholders continue to focus on the right things at the right time, and can meet increased demands and accommodate changes as necessary.
Four Challenges that Could Undermine Business Growth:
1. Finding and Keeping Top Talent
Complexity increases as you add people, not revenue. As such, when your human capital increases, your work will inevitably become more complicated.
As a company grows, hiring becomes a key concern. Identifying the vital roles that must be added to the organization is at the heart of employee acquisition. Make hiring an intentional act rather than a reaction to the increased activities. Secondly, attracting and retaining talented employees, especially in the current job market, can become a challenge. Hiring too quickly and not make smart hiring decisions is a formidable obstacle to sustainable growth. Always be on the lookout for top talent and be thoughtful with your hiring decisions. Evaluate and consider candidates for both competency and culture fit. Once you've found a great employee, it is imperative that you keep them. If employees' needs are not met adequately, they will become disengaged or feel lost amidst the rapid expansion of the company. Maintaining your company culture takes careful preparation and training, along with ensuring new hires fit within your existing team dynamic.
2. Do Old Assumptions Match the New Reality?
As busy as you are in hiring your team and defining a strong company culture, don't lose sight of your internal controls and operational structure. Highlighting the fact that growth changes the realities of your business, checking your current assumptions versus the new dynamics of your business is paramount to sustainable growth. Segregation of duties becomes increasingly essential and, how the job is done may change from one stage of growth to another.
While a business owner may have to have a hand in multiple areas while in start-up mode, as you grow, you need a team you can trust to free up your time to focus on high-level business decisions.
3. Maintaining Clear Communication
Rapidly growing companies must have a clear communication strategy, both within the executive team and down through the ranks. It is vital that you prevent employees from gathering their information on a trip to the water cooler.
Organizational leaders must work together to create a common language around the vision, mission, objectives, and how work is to be done. Ensure that everyone in the company understands and communicates in that language to create coherence and engagement. Discussing growth regularly, analyzing the company and its needs, and informing employees of the changes that are needed are necessary steps to accommodate growth within the organization. Offer strong leadership not only to communicate changes, but also to support stakeholders in adapting and keeping up with the rapid growth, allowing them to continue contributing to the company's goals and objectives.
4. Managing Cash Flow
One of the most significant challenges faced by fast-growing organizations today is cash flow. When a company expands rapidly, especially if it is not planned, operations become highly cash-intensive. When that happens, the needs of the company's activities may be different than leaders expect. Leaders must monitor cash carefully and make decisions for the organization based on current and projected growth.
Hence, it is essential to create weekly cash-flow forecasts with regular updates to help the executive team plan for expenses, payroll, and expected cash inflows. Through cash-flow analysis and accurate forecasting, business leaders are alerted to potential problems in advance.
Whether your company is currently experiencing rapid growth or not, it's crucial to understand how the success of your products and services can create challenges that occur when a business proliferates. Understanding what those challenges are and how to deal with them can help ensure that your organization continues to be successful and meets the changing demands associated with rapid growth.
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