Essential Considerations for Managed Business Growth

Your business is growing? Great! That’s just what it’s supposed to do – in moderation.

Like all good things, too much of anything – including expanded services, staff, client lists, and revenue – can be too much. A growing business is not necessarily a scalable one; too much uncontrolled growth, particularly in too short a time frame, can do every bit as much damage to a company as stagnation can, and sometimes even more.

It may sound unbelievable to many entrepreneurs and senior managers. After all, increased demand, sales and revenue is a good thing, right? It’s only logical to believe that increased profitability, improved corporate stability, and a better competitive position is the natural consequence.

That’s true, up to a point – the point at which your company infrastructure, workforce, technological infrastructure, and management systems fail to support the increased activity.

Growing companies who grow too fast typically encounter roadblocks in a uniform set of key areas:

Workforce Size and Skills. Growing demand for products and services usually means that your workforce needs to grow too – but it can be hard to attract and retain employees with the right skill sets and commitment.

Quality Control. Selling more means producing faster – but that doesn’t mean that inspection or testing processes suddenly take less time to properly execute. If defect rates rise significantly, costs will too.

Customer Service. More clients and customers will mean more need for interaction, handholding, and issue resolution. Your company will need the people and procedures to handle them.

IT Infrastructure. Small companies can often limp by with sub-par computers, networks, security and applications, so long as the cost of potential downtime isn’t catastrophic. The bigger your business grows, though, the more expensive that downtime becomes.

Processes and Procedures. If you started out small, the policies and practices governing virtually everything you do – from bookkeeping to tax filing to ordering snacks for the break room – were designed with a small business in mind. These seldom scale well as facilities, revenues, and headcounts grow.

Legal and Regulatory Compliance. The more business you’re doing, the more compliance matters. Your company and its practices will be under greater scrutiny as you grow, and it will become increasingly essential that all compliance matters be managed professionally.

How do you manage these challenges? By managing growth. One company we’re familiar with has done precisely that, growing at a pre-planned rate of no more than 20 percent per year. Operating in accord with a serious of multi-year plans, this IT services firm makes it a point to grow all aspects of its business in proportion to one another, recruiting and training new managers and staff according to a set schedule in conjunction with strategic additions to its service offerings and client roster. The result has been nearly two decades of steady, uninterrupted growth and profitability; its current workforce and revenues stand at ten times what they were a decade ago.

Growth must be carefully and closely managed if it is to serve the interests of the business without overwhelming it. To do it effectively, companies and their leaders – particularly if they have historically been hands-on, deeply involved managers – usually need to move beyond both their prior practices and their preconceived ideas. The practices that effectively serve a proprietorship, LLC or S Corp are unlikely to scale well to a public company; likewise, many of the people who were effective company stewards in the early stages may lack the skills, energy or vision to effectively transition to a parallel role in a greatly expanded enterprise.

At Trion Solutions, we’re often called upon to help companies manage their growth and transform their HR operations to accommodate it. On other occasions, we’re brought in to help companies that have previously failed to do so on their own. We can definitively state that proactivity rather than reactivity is almost always better for the business. Planning for growth beforehand, managing it effectively, and getting the professional reinforcements the company needs when they’re needed is the surest way to build a scalable, successful business.

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