How to manage the growth of your business efficiently

By David Barker If you start a growth phase in your business it is usually because you've done something right. A new product or service has been launched, marketing has been effective, the sales are coming in and you're delivering efficiently. This cycle will continue for a while, but as you take on more customers to feed the growth, you will at some point reach the limit of your business capacity. You might run out of human power (over-working leads to mistakes), business resources or the ability to manage operational issues effectively. At this point you need to stop and think. Quite often this involves you, as the business owner, giving up some of the day-to-day running of the business and hiring a team of experienced 'heads'. There are two main reasons for this: it will free up your time to come up with new strategies, products and ideas without having to worry about how the business is operating; and having an experienced management team in place (combined with some of the tips below) is very attractive to investors, and you'll probably need to get them on board to provide capital to expand. Pitfalls to avoid Here are a couple of common pitfalls to try and avoid. If you keep them in mind it will help you to find the time to grow your business: Let managers do their job: When you grow to the point that you need to hire others to help you manage the business you have to resist the temptation to circumvent them by going directly to your employees, or making decisions without involving your new management team. You can no longer behave as the founder who deals with all issues and has a direct line to every employee in the company. If you do, you run the risk of losing your managers and confusing your staff. Stop interfering and skip the meetings: When you start a business and you've done every role in it at some point, it can be very hard to let go of all the details. Us entrepreneurs love to micro-manage to make sure it's done our way, but it's important not to interfere and to stop attending every meeting. Time and life savers (eventually) Managing growth effectively is all about making sure you have the resources to deliver as demand increases, and the time to spot any potential problems before they bring the house down. Having processes for every aspect of the business, plus a well thought-out system for monitoring that they are working, are essential to make sure the quality of your offering is maintained. A systems-driven business also allows you to measure performance data against the processes. For example, how many widgets were made last week against target, or how many installations failed in the last month. These analytics provide a check to verify that the process was followed, or a record of what went wrong. Even when you have set up the systems, developed your management team and implemented quality control procedures, you must still pay attention to the numbers. So, let's imagine that sales are going well. Your revenue is growing at an incredible rate but your finance instinct tells you something isn't right. On the face of it growth is good and you've been hiring, but hidden expenses - such as discretionary purchases your staff might be making on company credit cards, or even just not reviewing your suppliers' costs on a regular basis - have started to outstrip your revenue growth. The statistics will tell you where the problem is, let you analyse it and then you can create a system with the right procedures to fix the issue before the situation affects your business adversely. This is exactly the type of problem that kills fast growing businesses and why it pays to understand your reports. There is no golden rule to managing growth, or even being able to generate it, as every business and situation is different. However, having a good grounding and time to think about a problem, rather than just reacting to it as one of a million things you need to do, will make sure you are at least prepared to deal with whatever life can throw at you. David Barker is the founder and technical director at 4D Data Centres