Managing a Fast-Growing Business | How-to Guides for running your business from Business.com

Growth is a common mantra for CEOs, but fast growth can muck up your business just as easily as it can catapult it into the firmament of entrepreneurial stars. The trick is knowing how to manage growth. Do it right and you'll:

Increase profits as well as revenue
Position yourself for further expansion
Maintain a workforce that can grow with you
Create an infrastructure that's built to scale

Action Steps
The best contacts and resources to help you get it done

Create a strategic plan

A strategic plan is your roadmap for growth. You don't need to follow it exactly (detours are encouraged) but the discipline of writing down your goals and the strategies you'll employ to reach them will provide you with focus and clarity. Without a plan, growth can become haphazard.

I recommend: For help creating a strategic plan, download a free template at Gazelles.com or Planware.com. Both sites also offer primers on strategic planning.

Take a realistic look at where you're going

Every good business needs a sales forecast. Without it, you won't know when to push for faster growth or slow it down until you can get systems under control and maintain high profits.

I recommend: A variety of software packages – hosted on your PC or on the Web – can make it simple for you to forecast your sales. Pull your information into forecasts and reports with QuickBooks Premier Editions. Or try Ross Systems Inc.'s iRenaissance, designed for process manufacturers. Salesforce.com offers real-time sales force management.

Hire every employee as if your life depended on it

When you're growing fast, it's tempting to hire anyone who walks through the door. Don't! Now is the time to be picky since you'll want a team with the skills and temperament for fast growth.

I recommend: For interview techniques, see The Art and Science of the Interview. To avoid hiring the wrong people, see The Nine Most Common Hiring Mistakes. Also, follow the guidelines in Employment Background Checks: A Guide for Small Business Owners. For help doing background checks, see this HR Guide list of vendors that will do them for you. Trying to figure out what to pay? Scan this HR Guide list of salary surveys by industry and position.

Monitor cash flow

As your business grows, you'll need to become more sophisticated about finance, particularly when it comes to monitoring cash flow, which is the lifeblood of your business.

I recommend: Know these Basic Financial Terms and Concepts. Use this Daily Cash Flow Forecasting Model. Monitor your critical numbers (profit, sales, back orders, and other numbers unique to your business) by using the dashboard features in your accounting software. Download free trial versions for Peachtree, QuickBooks, and Microsoft Small Business Accounting. (Some use the term "dashboard," but Peachtree in particular does not; its home screen serves as its dashboard.)

Build human resource systems that will accommodate growth

Don't get so wrapped up in growing revenue that you neglect the systems you'll need to support a bigger organization. Get your HR policies in place now so that you're ready for a larger staff.

I recommend: For reviews of a variety of HR software, go to 2020software.com. Find an HR consultant who can help you with payroll, benefits, compliance, recruiting, performance appraisals and building HR systems on the Human Resources Consultants Association Web site. At Nolo.com, you'll find information on creating an employee handbook, along with handbook templates that you can download for a small fee.

Maintain great customer service

When you're growing quickly, good customer service can slide down hill quickly – and you may not even be aware of it until you've created angry customers. Monitor your customers' satisfaction on a regular basis and ask them what you can do better.

I recommend: Consider using customer relationship management software. Search for a product that fits your needs at CRMBuyer. To get feedback from your customers, send out brief email surveys on a regular basis with easy to use software from Constant Contact or Vertical Response. Or try focus groups. See ten tips for running a successful focus group on Groups Plus.

Don't be afraid to ask for help

It's lonely at the top, and the bigger your company gets, the easier it is to become isolated. Now is the time to reach out to your peers, and to take advantage of the numerous free and low-cost resources that can help you grow smart.

I recommend: Service Corp of Retired Executives (SCORE) provides free advice to entrepreneurs. America's Small Business Development Network also offers free advice and at-cost training. For more information on peer groups, see For CEOs Only, which includes a list of peer groups for growth-oriented CEOs.

Tips & Tactics
Helpful advice for making the most of this Guide

Revisit and tweak your strategic plan every few months to keep current with market trends
When hiring, remember that mindset is as important as skill set; consider psychological testing for prospective employees.
Generate weekly or even daily financial reports to keep a close eye on cash flow.
Meet with your banker to discuss future financial needs, such as an expanded line of credit.
Expand your back office systems (office equipment, phones, payroll system, accounts payable and receivable) before growth puts you in catch-up mode.
Growth without profitability is pointless, so watch the bottom line and don't be afraid to put the brakes on if necessary.

The official source of Managing a Fast-Growing Business is
the Managing Growth Information page at Business.com

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