How can a small business prepare for rapid growth?

In my experience, small business owners plan for business slumps and slowdowns. Rapid growth doesn’t get nearly as much attention as it should, even though it has equal potential of killing a small business if the owner isn’t prepared to handle it.

I’ll discuss some tips and strategies in this blog post that will help you strategize for rapid growth.

4 key areas small business owners need to focus to prepare for rapid growth

The first point of view I’m discussing is of a small business owner who wishes to induce rapid growth in their company. I’ve laid down four key mantras that can help you achieve it:

Having the right team should be a small business owner’s priority to prepare for rapid growth

In my experience, staffing is one of the major obstacles in business that the owner faces when rapid growth occurs. If you are poising yourself for small business success, you need to focus on hiring professionals who can take the strain and push ahead.

Remember: you are hiring to fill the skill gaps in the growth spectrum. A simple way to respond to staff or skill shortages is to prepare job descriptions beforehand.

Create outlines of what your growing business would require once the rapid growth hits. Detail them with extensive roles, responsibilities, duties, caveats, etc., to save time you would spend hiring the right people.

For example, you can write detailed job descriptions for positions such as customer service desk operatives, inventory management staff, logistics, fulfillment partners, etc., to streamline things when required.

Having a spending plan is crucial for a small business owner while planning for rapid growth

Planning to spen in areas that will boost your business revenue, or increase in productivity at the right time when the business needs it is crucial for the success of the small business.

Let’s consider the example of Wise Acre Frozen Treats – this was a business that was spectacularly successful initially. The owner, however, invested in business assets (land and equipment) too soon and too shortsightedly, resulting in bankruptcy.

The key takeaway from this example is that the small business owner should have clearly defined milestones to be met before he or she can take a decision to invest resources

Some of the best areas you can look at deploying resources are

Invest in new, innovative hardware that makes tasking easy.
Invest in cloud-based, agility-friendly, remote-friendly software.
Invest in your employees by providing them with upskilling and training opportunities, morale-boosting activities, and more.
Consider reinvesting the profits into high-return, low-risk, long-term market instruments such as mutual funds, stocks, and bonds.

Once you have planned your spending and your business experiences rapid growth, you will be ready to face the challenges.

Give your customers what they expect from you

Consumers are smart – they will trust only what they see or experience, not what you tell them as a small business owner. Present your business right in front of all your stakeholders.

Get your brand and business perception right, keep it consistent, and maintain a stable presence across channels.

Data from various brand studies support the fact that your consumers are judging your business based on what you show them and how they experience you:

Colour improves brand recognition of a business by up to 80%.
86% of the consumers prefer shopping with an authentic business.
45% of consumers would unfollow a business on social media if it promotes itself too much.
Consistent branding can improve revenues for a business by as much as 33%.

Show your target audience what they want to see. Do it consistently, and your business can grow rapidly.

Having robust internal processes is crucial for small businesses to prepare for rapid growth

When a small business experiences rapid growth, there is a need to transform its internal systems and processes.

It helps to have a standardised set of workflows, processes, protocols, and policies in place to streamline the changing nature of the business.

Some of the areas that small businesses should focus on and be ready are the following areas

Sales tracking and automation
Sales incentive policies
Invoice generation and accounting automation
Process for onboarding new vendors
Company policies for employees
Automating payroll processes
Having a reliable accountant as a partner

In short, a good rapid growth strategy is to have a backup plan ready to help reinforce the internal operations of your business so that you can handle the growth and stress that comes with it

How should a small business handle unexpected rapid growth?

Business team meeting to conference, collaboration discussing working analyzing with financial data and marketing business strategy project, presentation and brainstorming to making profit of company

Image source

Once you have rapid growth, small businesses have the following aspects to consider to handle the rapid growth

These are your finances and specially cash flows
Your support systems
Your workforce readiness

Small business owners must necessarily plan for strong cash flows

Rapid growth brings on one of the toughest small business owners challenges that small business owners face: cash flow shortage.

During the stages of rapid growth, your business is receiving more orders (or contracts if you provide services), and you now require your supply chain to respond accordingly.

However, this process runs in a loop: to get more cash for the supply chain, you require more orders. To fulfill those orders, you require cash flow.

The best solution is to prepare a growth corpus early in your business venture

The second best solution is to try and negotiate better terms with your customers to get paid faster

You can plan a reinvestment in your business from time to time, or you could consider short-term investments with high returns through a registered financial advisor.

Its really surprising how very few businesses invest surplus cash in the stock market index to get superior returns on their idle cash.

As you progress, try and build a business, where you get paid first and then you have to pay later. This will create a virtuous cycle where you always have a cashflow positive business and your business will become resistant to external shocks such as rapid growth

Reach out to other companies that help small businesses grow

There are several companies today that help small businesses get access to the resources they need to support rapid growth.

For example, the Small Business Administration (SBA) is a government organization that provides entrepreneurs with resources like affordable loans, services like marketing and business development, training and operation improvement resources, and much more.

SCORE is a partner agency of SBA that focuses on connecting entrepreneurs with niche small business owners for mentorship. There are SCORE chapters in every state that small business owners should take advantage of.

A list of trusted companies that help small businesses grow is below

Several more companies exist to help small businesses in their growth journey. Build relationships with key people in these places who can guide you when you experience rapid growth.

Small business owners need to manage their energy to avoid burnout during rapid growth

Business growth is exhilarating, no doubt; it is exhausting, too. Having to pull long hours on the desk puts a lot of stress and pressure on the employees. Your business can fall apart if your employees fall apart.

It is important to give them routine encouragement, breaks, appreciation, or a listening ear when they need it. If possible, consider hiring a mental health professional that your employees can go to for help.

More importantly, it is beneficial to show your workforce the difference their effort is making towards company growth. It provides motivation to keep working hard to reach the goals.

Small business owners need to have a back up roadmap in place as a fallback option

Rapid business growth can put a lot of strain on the business, but readiness will help the business take advantage of the situation. Have your strategies and financials well planned out, have your skill gaps identified and new positions filled.

When the growth spurt hits, you will be ready!

Much like Jason Fried says, “There is nothing wrong with staying small. You can do big things with a small team.”

In case you are wondering that staying small might be good thing, you should look at my other articles addressing why you should pursue growth and 6 situations when you should consciously take a call to not grow.