As your business grows, your turnover should increase, but so too will the elements needed to produce that increase, for example, the right staffing, premises, production equipment and investment funding.
As a result, business growth means an increase in responsibility for a business owner, with more to keep an eye on and more input needed to support the day-to-day running of the business. There are several things to keep in mind, but the first tip is simply – don’t try to do it all on your own.
Build a great top team
As a business grows, sole traders or partnerships will, most likely, need more help at the top management level. There’s only so much time in a day, so think about whether you and your current team have the capacity to manage a bigger company, or do you need outside support?
You may need to expand your senior management team to lead your business to ever greater production levels, and while it’s great to support internal succession and appoint from within where possible for reasons of company loyalty and consistency, you must make sure that your top team has the skills needed before making a commitment.
Individuals taking on leading roles should have the experience and skills required, and you can help support that by encouraging links with professional bodies or colleges that offer training and qualifications. For example, there’s the Institute of Directors and a wealth of management training at universities to call on across the UK. Such affiliations are also a great way to keep up with new legislation or regulations – do you have an in-house expert on GDPR or changing HR regulations, for example?
If you’re not yet at the stage of appointing senior managers, consider outsourcing functions such as finance, HR and IT support so you can concentrate on the operational areas where you’re really needed and have the expertise. As a company owner, having an overview of the business is expected, but you won’t be able to run everything yourself.
More staff = more ‘stuff’
As you expand your workforce, you’ll need more infrastructure and kit to support everyone’s work – PCs and laptops, landlines, smartphones and possibly even cars.
Make sure you have a tracking system so you know who has what, and that there’s a process in place for keeping all the IT equipment up to date with security updates. It’s also worth considering investing in some training for staff on cyber security – as the number of individuals working for you grows, so does the risk that someone will inadvertently click on a link they shouldn’t or open a malicious attachment, causing a major security breach and leading to ransomware demands and other such headaches for you and your customers.
Keep an eye on your business insurance to make sure it keeps up with your assets and covers you for potential problems such as cyber attacks.
On another practical level, as staff numbers increase, consider whether your facilities are fit for purpose – informal staff areas, toilets, storage space in the office kitchen and so on. If you have staff who work from home some of the time, could you perhaps develop shared areas where staff come and go rather than providing dedicated workspaces for everyone?
More customers = more customer service
As your business grows so will your customer base, and that will bring an inevitable increase in contacts with the company for queries on prices, stock availability, deliveries, returns policies, engineer appointments and so on – whatever it is that keeps your company ticking. Now is not the time to let your customers down as you embed and sustain your growth, so it’s crucial that you keep up the same levels of responsiveness that brought customers to you in the first place.
You can either bring in new customer service team members or consider outsourcing the function to an external supplier that has trained staff ready to go and who can answer queries according to your instructions. This could be especially helpful if you want to offer 24/7 call handling without the hassle of keeping a building open or worrying about shift work and security for out of hours staff.
Keep an eye on the cash flow
As well as requiring an initial investment, an increase in business activity will lead to bigger monthly bills – higher staff wages, National Insurance and pension contributions, bigger utility bills, increased stock purchases etc. Doing more business costs more money. Consider how much that will affect your cash flow requirements and make sure you always have enough money available at the right time to pay those larger bills.
Funding options to support cash flow are available and you could speak to a financial advisor or broker about invoice or purchase order finance. These will allow you to get your hands on the cash due for orders before they are due for payment, allowing you to buy in any materials needed and pay for the running of the business without waiting for your invoices to be paid.
Another issue that’s worth considering is that, while we don’t see it happen very often, just occasionally a bank’s online system will fail, making it impossible to send payments from your account. In the unlikely event that that happens, do you have a plan in place for how you’ll pay staff, buy stock and so on? Such incidents have included systems going down at TSB in April 2018 and Lloyds Bank in 2017 and ‘significantly reduced capacity’ for business account users of HSBC in 2016.
Don’t go it alone
Whatever stage of business growth you’re at, there’s a wealth of support out there for business owners and entrepreneurs. Across England, there are 38 local enterprise partnerships known as growth hubs – local public/private sector partnerships that join up national and local business support, making it easy for businesses to find the help they need. There’s also the British Chambers of Commerce, whose network offers membership and training opportunities.
There are also local business networks all over the country – just ask other local businesses how they network and you’re bound to find one. And if you don’t find the right fit for you, consider starting one up yourself!
