Number 8: This is the first in a series of eight posts concerning the top causes of small business failure. We will work our way up to the number one cause; however each one is an important issue for any small business to consider. Starting at the number eight most common failure for small business failure is unexpected growth.
In today’s tough economy, this is important to consider because this downturn will end. Are you ready for the turn around? Are you prepared for growth?
Rapid growth is a silent and unexpected business failure waiting to happen if not done properly. Many people do not understand the proper way to grow a business that promotes a healthy and strong business structure while increasing the revenue.
A. Research: Before you grow you must research on how much it will cost you to expand the area or provide an additional service in your company.
B. Plan: Determine how fast you can grow with your new knowledge on the cost of the new growth, then make a growth plan that will walk you through each step required to make your business ready. A great tool to walk you through the steps is BusinessPlanPro.com. A popular rule of thumb is 15 to 20% per year unless you have professional business growth coaching or bring in seasoned advisors. This will help avoid potential cash flow problems and or structural problems within the business.
C. Build: What processes and infrastructure can you set-up in place so that growth does not bring your business to a sudden halt. Do you have technology tools in place to not only manage but streamline your customers and operations. Examples include setting up automatic Customer Relationship Management (CRM) such as SalesForce.com, billing and invoicing solutions such Shoeboxed.com, and Inventory Optimization such asPhitch.com.