Growth has become an industry. From business incubation to the modern ‘growth hacking’ service, the subject of how to expand an SME safely and quickly is constantly at the front of the entrepreneur’s mind.
And it’s not even guaranteed to be great when it happens. Each year, startups are caught by surprise by growth and suffer the consequences of their lack of preparation. From the loss of clients to drastic damage to their brand image and the perception of their company, the double-edged sword of progress is as real a threat as it is a goal.
Today we’re running through four punchy points on how your startup can protect itself from the risk of growth while still cultivating an approach that will see it happen.
Honest, hard questions
It’s easy to think of the bright side. As an entrepreneur, you spend your evenings and weekends pouring over your websites, products and services with a dream of expansion in mind. And what many fail to do in that first critical year is to ask the questions that many avoid: how it could all go wrong.
While this is a deep subject in of itself, new business owners would be well served by splitting the larger subject of growth preparation into compartmentalised chunks. Consider the following approach, where we look at the subject in several main areas to be subsequently drilled down into.
People: If only people were productive all the time! A company experiencing a spike in growth from sudden success will quickly realise a particularly unpleasant side effect of that opportunity: stress. Whether you’re a drop-shipping business or a hopeful retail store in a bustling city, any sudden escalation of workload and expectation will test the resolve of you and your team.
Beyond simply needing more staff when the time comes, consider how you will be supporting and empowering the people you have when it’s time for everyone to step up. In an effort to improve how long your talent stays with you, considerations such as employee engagement and wellbeing initiatives can bear fruit in the long run.
Tech: Your logistics and IT infrastructure will be tested by a sudden spike in business. If you ship, how much can you escalate that shipping with your logistics partner before prices hike or their own capacity dries up? If your website suddenly is seeing a spike in traffic, have you tested a similar increase before or talked to your service provider about the possibility?
Fortunately, this is an area of preparation where you’re able to get quantifiable and clear answers most of the time. And it’s vital that you do.
Brand: It’s easy to get lost in the immediate reality of a growth spike. You’re taking care of orders and you’re keeping clients and customers happy, but are you missing out on a trick or two while the cash is flowing?
To prepare your brand for growth, it’s sensible to look towards your communications strategy and how you interact with your existing or potential audience. If you’ve suddenly had breakout success, you’re missing the potential for even more business if you don’t have a plan in place on how to share the good news across newsletters and social media. This doesn’t have to be the most inventive kind of planning in the world; you can do wonders by having premade messaging and social channels ready to go for when the best-case scenario occurs. You’ll be glad you did; it’ll make squeezing all the value you can out of your business easy to do ‘on the side’ as you focus on work.
Cashflow: One of the most frustrating ways in which growth can slip by your fingers is through having a fragile cashflow. Particularly for SMEs and recent start-ups, it’s often the case that there’s a budget allocated to just get by. When you get caught out by interest, you can find yourself taking so long to gather money to capture the opportunity that your prospective clients and customers lose interest.
To avoid this risk, have a few means by which you can obtain money quickly prepared. This could be as simple as an understanding between a friend or family member or as formal as having queried loan options with a bank or other business loans provider. By doing so, you ensure that money isn’t the thing that gets in the way of your brief and critical opportunity to expand rapidly.
Looking at our four pointers here, it quickly becomes obvious that growth isn’t as simple as ‘we’ll see to it when it happens’. It’s work in advance, but it’s critical that it’s done. With a groundwork in place and a plan already prepared, you’ll be well set to get scrambling in the moment once it finally occurs. We wish you the best of luck with it!