Tips on how to manage your business' growth.

Managing your business’ growth

By Leodora Darlington

For someone running a business, it is incredibly important that they do not attempt to do all the work by themselves; delegation is incredibly important in all leadership roles. If all a person does is carry out tasks then he or she is a worker – if a person delegates roles to different members of the company, only then is he or she part of a team in which everyone is working together. It is important to remember, as it is often said, that there is no ‘I’ in team. “Force yourself to delegate, invest in quality people you can trust and put stringent reporting in place so you’ve always got a finger on the pulse,” says Ms Shaa Wasmund, founder of Smarta.com (a website offering advice to entrepreneurs).

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It is relatively easy to keep tabs on members of a small business, say with only twenty-something people at its start-up point and for information to be passed around to everyone. However, as the company grows, and the number of staff increases, it is important – if not absolutely vital – for good communication to be upheld. This can be done most simply through regular meetings, and regular emails. Mr Alex Cheatle is the founder of Ten Lifestyle, which is a concierge service that over the period of six years grew from 33 to 240 staff. He suggests that, “The more people you can hang on to, the fewer people you have to recruit.” This is a very good suggestion, as employees who have been in the business for a while know the business better. Margaret Heffernan is an entrepreneur, Chief Executive and author – she states, “Hire for attitude more than skills and make sure that the values of the people who work for you are consistent across the company.”

It is also important to think about the number of employees you need, although your business may be growing, if you hire too many employees, it will be a waste of resources, as you will find yourself paying staff for doing very little. Here is a good analogy: You need to bake a cake, and you have one person to get out the ingredients, one to mix them and one to pour the mixture into a tin a put it in the oven to bake – you may also have someone to take the cake out, which is a total of four people. Now say someone asks you to make five cakes and you get forty people to help you, which averages out as eight people per cake – twice what you had before. You do not need two people to take the cake out of the oven, or two to pour in the mixture etc, which could happen. The other alternative is that four people will get to work making each cake and four will stand around doing nothing as they are not needed – this is the result of employing too many staff. At the same time, it is important not to overwork staff, as happy staff work more efficiently.

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Margaret Heffernan also makes the point that, “as you grow, you need to focus on the high-value customers, which means that some of your early customers may need to go”. It is understandable for a business in its early stages to take on any customer it can, despite perhaps being difficult to please and not putting in particularly large orders. In growth, it can be beneficial for a company to lose these clients, who could just add to the difficulties and stresses of coping with a growing business. “Growth has to be managed,” attests Shaa Wasmund, “When you’re starting up, to a degree you’re happy to let the business run away with itself and see where it goes. It’s a seat-of-your pants adventure, but it can’t and shouldn’t last forever. Carry on like that and you risk overstretching yourself or overtrading. Plenty of great businesses and entrepreneurs have fallen into that trap and failed as a result.”

Emma Wimhurst is an entrepreneur and author, she wrote ‘Boom: Seven disciplines to control, grow and add impact to your business’. She says, “Start by knowing what you want to achieve. You should be able to outline your aim in 50 words. Your formal business plan should include market research, details of the resources needed for growth, how you intend to grow and clear goals, so that you can assess progress.” Shaa Wasmund also believes that “You also need to know when to cut your losses and move on.” It is incredibly important not to allow the business to just run away with itself, a view supported by Ms Wimhurst who also adds that “If you find yourself in a position where sales are soaring, you will have a huge stress on your business if you don’t have the systems in place to deal with it... you need to take a step back and assess whether a particular idea will help you to achieve your aim”

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It is also incredibly important to keep on top of your finances Ms Wimhurst also reminding us that “The information your accountant sends you will be a historical record, but if you are planning for, or managing, growth, you need to know what is happening right now.” It is also important for a business to assess where its growth is stemming from – is it simply because there has been an increase in demand nationally for the product you make? Are there no current competitors? Is the largest part of your profit coming from only one contract? If so, it is important to remember that all these things can easily change. What is important is to grow on the basis that your business has a good product, a good sales team, and in general good staff, or at least to work on these aspects as they could encourage healthy and relatively stable growth. It is also key to know what your numbers look like to know if you are financially capable of growth, in order to avoid any unpleasant surprises and to secure a good loan if required.