Businesses: How to Handle Faster-Than-Expected Growth

To many early-stage businesses struggling to attract sales, the idea that experiencing too much growth would be a problem can sound absurd. After all, in a hypercompetitive age, finding yourself in a position where many people want whatever it is you’re offering sounds like a blessing.

But that’s not always the case. While it can be easy to think otherwise, fast growth does not necessarily equal success. In some circumstances, it can be a problem that puts the business in a worse position than if it had experienced slower-than-expected growth.

But that generally only happens if it’s managed incorrectly. By adopting a few key strategies, you can overcome essentially every issue that fast growth can bring. Let’s take a look.

Focus on Cash Flow

Most businesses can ride out their faster-than-expected growth, provided they can get a handle on cash flow. Fast growth can quickly cause cash flow problems because the business has to up its expenditure — such as inventory or staffing — before revenue arrives in the bank account. Pretty quickly, businesses can find that they have a lot of bills that have to be paid immediately while they’re still waiting for revenue to arrive. The best ways to handle this are to get a better grip on working capital (for example, shortening payment terms and avoiding overstocking) and use short-term financing tools when needed.

Get the Space You Need

Even businesses with plenty of working capital can find themselves struggling to keep up with fast growth. When things become amplified, the original work premises may no longer suffice. Businesses tend to invest in infrastructure based on expected needs; when those needs change, they can be left in a more challenging position.

There are easy ways to get the space without having to make a huge, long-term commitment. For example, a temporary building hire can be used for storing inventory or equipment. That option is often better than trying to find or build a long-term solution. Similarly, rather than finding a larger office for any additional personnel that you need to bring on board, you may consider renting a space within a coworking space, which allows for greater flexibility. Rather than committing to a long-term lease, you can simply pay month-by-month until you settle on a more permanent solution.

Bring in Specialist Help

In some cases, dealing with unexpected growth becomes too much to handle on your own. It can be uncomfortable having to make decisions knowing that they’ll have a long-term impact on your business’s profitability. If you find yourself struggling to keep up with demands or are unsure of the correct steps to take, then look at bringing in specialist help. You can usually hire executives on a short-term or consultancy basis, which can give you expert-level guidance for a fraction of the cost of hiring a full-time executive. It’s also recommended to seek out a mentor or two; sometimes, simply having the ability to bounce your ideas off someone who has been there, done that, can give you confidence that you’re steering the ship correctly.