Starting the Right Way
By Ryan Kh
It always feels great when your business is growing. Every entrepreneur wants to grow their business as quickly as possible. Unfortunately, some business owners run into problems when they try to grow too quickly. Brian Hamilton, a contributor to Forbes, writes that business owners often run into problems when sales exceed $5 million.
Why can rapid growth be a major problem and what can you do to manage it more effectively?
As a company gets off the ground one of the most important aspects is how the foundation is laid. Is the right team assembled? Are your products or services differentiated from your customers’? Do you know where the investment will be allocated? These are all important questions that need to be answered before a company sees rapid growth to ensure its long term success. A good example of this is the team at 888 Ladies. When they decided to launch a new brand into their online games portfolio, a team was assembled to determine what was missing within the market, how they would execute on developing the game and how it would be successfully launched. This type of planning ensured the success of their 3D Treasure Island game.
Cash Flow Management
Many business owners are highly creative, but lack of financial competencies to ensure a healthy growth. This can be a serious problem when the cash flow becomes more complex.
Cash flow problems are responsible for about 60% of all business failures. Many of these problems arise as companies grow, because they have a harder time managing larger volumes of money. They often get fixated on the rising sales of their company, while missing the fact that expenses are growing even faster. They may eventually run into a problem where they no longer have the funds to close their accounts payable, which leads to filing for bankruptcy.
As your business grows, you need to understand that the cash flow management is going to become more complex. You need to make sure that you can generate the revenue streams needed to pay your financial obligations.
Handling Client Obligations
As your business grows, you’ll be facing a much larger workload than ever before. It can be difficult to keep track of all your clients and make sure everything gets done.
You need to handle this by making sure you have enough workers and provide them with the support they need.
Hiring the Right People
As you expand, you’ll have to delegate more of your responsibilities to your employees. You need to make sure that your new hires are trustworthy, because your brand’s success hinges on their ability to do their job properly.
You must resist the temptation to hire anyone that’s interested in working for you, because there are a lot of very unqualified people that will want to get a job at a growing company. You want to find people that have the right credentials and attitude, which means you’ll need to vet them carefully. 888 Ladies is highly dependent on their employees, so they screen them very thoroughly before making any hiring decisions.
Ryan Kh is a big data and analytics expert, marketing digital products on Amazon’s Envato. He is not just passionate about latest buzz and tech stuff but in fact he’s totally into it. Follow his latest posts on Formsmix.om. Follow him at @ryankhgb.