Your business is taking off, and with growth comes the opportunity to make the shifts necessary for success. It’s time to assess the company’s needs, your needs and how to meet them. Whether it’s hiring, buying equipment, implementing new programs or documenting processes, you can adjust day-to-day operations so your business can level up.
How do I know my business is ready to grow?
Key growth indicators include increasing net profit, hitting maximum capacity and realizing the need for a new business model.
You’re ready to grow if you:
- have stable and up-to-date financials
- have projections of sales cycles and cash flow
- know what type of growth you want
- have researched market demand and flexibility
Types of growth include:
- expansion and infrastructure
- branding and marketing
- human resources
There are three funnels to balance in the early growth stage:
- Revenue/profit: including sales, marketing and expenses.
- Equipment/processes: including systems, software and outsourced operations. Is everything in place to potentially handle more business?
- People: do you have the right people in the right roles at the right time?
Juggling these concepts is where you’ll need to discover your own balance. You might recognize a chance for more revenue—a new product, a new demographic or more interest from your current market. Revenue growth pushes you to a point where you’re forced to expand, but then a bottleneck might occur if you don't have the processes, equipment or employees in place to handle more customers.
To capitalize on revenue growth, you must address the bottleneck by balancing out the other funnels—you could hire someone or purchase equipment, for example.
Predicting a bottleneck far in advance allows you to prepare for these growth steps. The magic is in keeping those three funnels balanced so bottlenecks don’t occur.
Manage finances early
Startup owners who balance the three funnels wisely handle their finances early. Building a reserve fund—before the market picks up—sets you up for success. What capital is accessible while your business grows? How will you fund expansion? Invest in processes and equipment (software or tools, for example) you foresee yourself using when revenue increases.
Plan ahead for your first tax season. If you don't have an accountant already, interview potential candidates to find one that aligns with your business and values.
Know when to hire
Hiring timing is different for every business—there are no hard and fast rules. Once you have a revenue opportunity and processes in place, you can evaluate your team’s skills, see what’s missing and make the hire.
Take inventory of your skills and passions, and delegate or outsource the other tasks. Focus on your strengths, because that's what will take the company forward (and prevent burnout).
The recruitment process will vary depending on your business, but it generally involves creating a role, sharing the job posting, shortlisting and interviewing candidates, checking references or assigning an assessment (to gauge how that person will operate) and extending the job offer.
Match roles with people’s passions and talents to fill the gaps, and you’ll get better results as you target growth objectives. Having positions with clearly defined responsibilities will help your employees feel empowered.
For a deeper understanding of how and when to hire, skip ahead to the hiring section of this guide.
Continue building your network
At this stage, define what you need from a network, like customers, partners or suppliers. Be clear about company values and what distinguishes your business, and look for people with similar values who appreciate those differentiators.
Be targeted in your approach. Don’t attend every event or see networking as sales or marketing tactics. It’s a relationship-building tactic, so be your authentic self.
Be open to who you sense connection with, and let relationships develop organically—it might lead to a new customer or someone who has access to potential customers.
If your business is starting to feel comfortable or tipping into the steady stage, redo your SWOT analysis—strengths, weaknesses, opportunities and trends—to learn what’s working or not.
- What new strengths have we developed as a company?
- What new weaknesses appeared? What weaknesses have we erased?
- What new opportunities lie ahead?
- What new threats are out there? What threats have disappeared?
Re-evaluating these questions might redefine what this steady stage will look like. Examples include assessing whether there are too many people involved in a project, what your existing customers need or how to improve internal communication.
Develop an action plan based on what you learned from the SWOT test and reflect on growth. Will you be able to maintain profitability and boost your competitive edge as your company expands?
As you approach that steady stage, documenting processes becomes even more valuable—you might start to have staff turnover. Also, if you have manuals or guides, then your business won’t necessarily depend on you being constantly present to train, troubleshoot or answer every question. What are the necessary processes you have, the ones that would jeopardize your operations if they fell apart? These are the processes to kickstart your documentation with.
Take a comprehensive view of your business. Track the three funnels (revenue, equipment and people) and notice if and why there are bottlenecks. Figure out what you need to do to keep the funnels level—that's when you have efficiency, good profit margins, happy people and a healthy company.
- Are we taking on more business than we can handle?
- Is it starting to feel like we don't have the right people doing the right things?
- Are we understaffed?
Once you've started to think about how your business might build and grow, begin to think about who you need at the table to make it happen and begin hiring.