The way companies grow often confuses first-time entrepreneurs who assume that their business expansion will only concern the workload and manpower. In other words, they assume that the greatest difference between a small and a medium business is the fact that the first one has 10 people in the sales department while the second one has 100 salespeople. In truth, the change that occurs during this transition is infrastructural in nature. As your company grows, you will have to start adding services you never before even considered using. With this in mind and without further ado, here are five things you need to learn about expansion.
Start by networking
By mingling with people from the business world, you will get in touch with agencies to outsource to, potential investors and future business partners. Moreover, you will meet HR experts, IT security moguls and professional recruiters you can come to cooperate with later on. Nevertheless, networking has its own set of rules you would do well to obey. For instance, when the meeting is scheduled, you need to avoid arriving late. Then, you need to avoid talking about what you need as soon as you sit at the table. Finally, give your full focus to the person you’re conversing with. As Robert Breault once said, ”Charisma is not just saying hello. It’s dropping what you’re doing to say hello.”
Tend to your cash flow
The fact that your company is on a tight budget is natural for a young enterprise, yet, it might pose a certain problem in the long run. You see, a tight budget often means that there are not enough funds for innovation. In fact, even if some of your standard equipment breaks down, you can barely afford to fix or replace it. Then, while you’re never late on salaries, bonuses are out of question, which directly impacts the motivation of your staff. In other words, in order for your business to grow, you need to burn some cash but, in order for this to be possible in the first place, you need to tend to your cash flow.
Taking a business loan would be the most logical first step, however, this is often quite difficult for a sole proprietorship (which is a category that most of the small businesses belong to). Therefore, it might be simpler and more effort-efficient to look for personal loans instead. Apart from this, as your company grows, you might feel the need to share this burden with someone, therefore, you might want to look for someone willing to buy equity in your company. In this way, you get both financial and administrative relief at the same time.
Groom your company’s future leaders
As a one-person startup, you don’t have to worry about hierarchy. The same goes when you’re running a small group of employees; however, what happens when you get several teams within your organization or when the number of people in your employ exceeds 20? You can’t expect to still be able to micromanage everything, neither should you. This is where you need someone else to step in.
Here, you have two options to choose from. You can either hire a manager or groom someone from your company to assume this responsibility. The latter is a clearly superior choice, seeing as how it is more frugal and more efficient (no need to get accustomed to a new situation). Nonetheless, this requires a no small amount of foresight.
Talent retention is key
In the previous sections, we mentioned the issue of bonuses and other employee benefits; well, things are even more serious than you might have assumed. If certain requirements or expectations aren’t met, you can expect your employees to start leaving in droves. The greatest problem here is the fact that your best, most capable and most productive employees will be the first ones to leave, seeing as how they have the most options available. Due to the fact that in most companies a small fraction of competent employees does all the work, this could spell a disaster for your company. To avoid this, focus on talent retention as much as you can.
Focus on return customers
At the end of the day, if you really, really want to grow, you need to keep in mind that persuading people to buy from you isn’t enough. You need to make them come back over and over again. For most companies, 8 percent of customers are able to generate 40 percent of the profit, however, with the right strategy, you might even be able to increase this percentage even higher. Furthermore, if the previous customer experience was a positive one, you have a much easier job of persuading them to return. Don’t be too shy to go with a post-sale follow-up. This can range from sending a thank-you email to starting a loyalty program.
As you can see, growing your business is much more than simply expanding its capacities, it’s mostly being able to add new dimensions to your infrastructure when you deem such a thing necessary. In time, merging and outsourcing might also become viable options, nevertheless, this is a story for another time.