Every business's goal is to grow, and fast growth can be incredibly exciting. It makes you feel successful, but it's too easy to mistake it to last forever.
However, fast growth is not always sustainable. If your business's growth slows or, worse, reverses, you may find that you have taken on expenses you can no longer afford. Or, you may find you can't keep up with the growth, trying to continue to do it all as your burdens increase.
It's vitally important to ensure that you sustainably grow your business. You don't want to end up with your company being a "bubble" that bursts, leaving you with nothing. Here are some things to think about when you are trying to grow your business and for when it is growing faster than you expected.
Explaining Sustainable Growth
Sustainable growth can be hard to define, but here are two key things to keep an eye on:
- You don't have to take on additional financing or debt. In other words, make sure your business lives within its means, which includes tactfully dipping into your savings. Make sure your business is paying for itself. Taking on debt to push for growth can quickly leave you spending future profits that never materialize, resulting in more debt and potential bankruptcy.
- Your sales are not overextending your resources. You aren't working 100-hour weeks to keep up, nor are your employees. You aren't selling products you don't yet have, and then try to play catchup. That is one reason why very rapid growth may not be sustainable. As you grow, it becomes harder to satisfy your customers, and then you start getting bad reviews and feedback, which can sink your company. Sustainable growth means making sure every customer is happy.
Sustainable growth occurs by properly managing your funds. You can grow your business sustainably and organically. as your business expands., and you can keep adding resources as you can afford them. That is how Walmart went from one store in Rogers, Arkansas, to 24 stores after five years to the empire it is today.
The alternative to this approach relies on bringing in outside funding through investors. Start-up companies rely on this approach where they do the legwork of developing an initial product, then find investors to fund their growth. That allows you to bring on more staff and quickly transition to the structure of a larger company.
Of course, not everyone wants to own an "empire," but sustainable growth can get you wherever you want to be. And one approach is not more correct than the other. You alone know your goals, but sustainably achieving them sometimes needs help. How you go about it largely depends on your goals, company, and your industry.
Maximize Sales and Monitor Growth
Solid, sustainable growth in sales is vital. You must make sure that you are not selling more than you can produce. However, you still need your sales to grow. Without growth, you will stagnate and eventually fall behind more agile and dynamic competitors.
That includes spending efficiently and knowing what metrics you need. Sales growth is different for a car dealer (high-value items people buy rarely) versus a bookstore (low-value items people buy frequently), but you still need to attain customer loyalty. Word of mouth is one of your most important means of growing name recognition. You want people to come back when they need or want something, no matter how often that is, and you need them to tell their friends.
One key to this is developing a brand story and a value proposition. You want your brand to be recognizable and associated with quality, and legitimately so. As you grow, you need to change advertising and marketing strategies accordingly. A new company has to focus almost entirely on discoverability and having people know you exist. As you become more established, you need to change. Knowing when and what to change requires proper metrics and feedback.
Continuing to challenge yourself is a key to growing, as it prevents your company from becoming stagnant. Doing so pushes your business further, helping you grow, and it can bring you into new industries that end up supporting you long-term. Balance having a willingness to take on new projects, while being mindful of what you say no to. Solving complex problems is a great way for some businesses to push their boundaries, but don’t accept work so far out of your specialty that you do a bad job with it.
Develop a Robust Internal System
Finally, all your internal systems need to demonstrate solid growth as your company grows. Every system you use must be scalable. Otherwise, you will spend more money on new systems and software.
Hiring the right people who can grow and develop into new roles as your company needs them is also very important. It also helps with retention by giving your employees career goals they can work towards without needing to leave your organization. Employees hoping for an internal promotion are more likely to stick around and more likely to work towards your company's goals. Build a solid core of staff you can consistently depend on, who you plan to grow into the future of your company. They are the foundation you use to grow.
Taking on more staff requires more internal leaders, and in many cases, you can promote from within your organization from that core group. It also increases HR responsibility. Compliance is one significant area; the obvious answer is the need to provide health insurance of a certain quality as soon as you have 50 employees. HR responsibility also increases if you have multiple locations, especially if you end up with locations in numerous states.
Learning to manage your requirements through difficult times is also a vital lesson to learn. You can work to accrue a greater amount of resources and staff when launching new products or services. Many businesses used that approach to bring on more staff to offset potential staffing shortages due to the pandemic and Great Resignation. It helps them maintain their growth until it either stabilizes or continues to grow.
Increase Efficiency by Partnering with a PEO
Increasing HR efficiency is, thus, an essential part of developing these scalable systems that support growth. An excellent way to do this is to outsource to a PEO. A professional employer organization (PEO) can help with this by taking routine HR matters off your plate so you can focus on these more important things. That includes HR, as retaining talent is vital to sustaining growth. Having the staff positions to handle growth is worthless if you don't have those positions filled with engaged, talented employees who care about the company's growth.
PEOs don't charge you more and more for payroll as your company grows and can provide the enterprise software you will need as you grow. And, by taking on the tedious paperwork, they free your HR staff to focus on growth and provide employees with the support they need.