Small businesses drive our national economy, but fewer than half survive beyond their first five years. Sadly, a number of them fail simply because they do not plan effectively for potential growth.
Many small business owners hope to grow their firms — but not all of them are prepared to seize the opportunity to expand when it arrives. (Scott Eells – BLOOMBERG)Many grasp for every customer and collapse under the weight of their own ambition, rather than developing a practical plan for reliable and continued growth over the long term.
However, by analyzing your company’s current resources and your projected growth predictions, you can design a successful plan to ensure your continued dedication to customer serviceand reliability. Consider these strategies:
1. Prepare for growth
Accurate supply-and-demand predictions, based on thorough research, are vital for a business. Rarely do start-ups initially have unlimited resources available to handle substantial growth.
In many cases, you alone (or possibly a handful of partners) control every aspect of the business. If your business does gain momentum and a large number of new customers, you have to be prepared to accommodate the new business without sacrificing your quality.
My business encountered this dilemma in 2007. We changed our site and gained hundreds of daily inquiries from Google traffic, but we simply didn’t have the resources available to respond to the nearly 7,000 emails sitting in our inbox.
Since we couldn’t take new leads, we began selling them to competitors and focusing on the clients we worked with from the outset. It was a tough call, and some promising business was lost, but we maintained solid client relationships and eventually had the necessary workforce and infrastructure to handle increased volume.
So, create a suitable plan for potential growth. Analyze your gross daily profit and gross total debt on a monthly basis to clearly see your recent activity and project accordingly.
2. Avoid overextending your business
Entrepreneurial instinct suggests that bigger is better for your company. Likewise, it seems sensible to diversify your services or products to reach the largest audience.
These two assumptions kill many promising small businesses. Instead, focus on what led to your success, rather than what you hope will lead to astounding revenues. Know your product and the skills that set your business apart from the competition. That is the ticket to lasting success.
As a young entrepreneur, I attempted to take on too much. I was not ready — in terms of both capital and resources — to start an additional business, but the temptation was strong since I was generating quick revenue with my secondary start-up.
Thankfully, I evaluated my strengths and made accurate predictions about which business had the most potential for long-term growth.
While overextending yourself early can spell disaster, you can plan for eventual growth once you are stable by securing domain names and profiles on major social networks.
It’s similar to freezing assets: You can ensure they’ll be available in the future when you are able to take on more.
3. Focus on customers
Prioritize the people generating your revenue: your current customers. If your service begins to slip with a few additional clients, imagine how your firm will be perceived by that multimillion-dollar potential client.
Make effective and frequent communication with customers a priority. Ensure that your shipping and delivery services are reliable and efficient. By communicating how important your top clients are through quality service, you build bridges to larger clients and revenues in a practical, reliable way.
Even some successful businesses, like eBay, suffered initially from not meeting customer demand. Original customer support for their mega-sellers was subpar, and there was no direct line for service.
Those sellers opened their own online stores and gained loyal clients. As a result, even when eBay adjusted to provide more services for large sellers, they had already lost out on many opportunities.
4. Hire for the future
One common mistake rapidly-growing small businesses make is hiring mediocre employees to fill new positions. Unpredicted growth can force employers to bypass extensive background checks and make questionable hiring decisions.
The wrong employees can quickly damage your reputation and reliability. Even during stressful times, reflect on your goals for the business and how surrounding yourself with quality people enhances those goals. Taking a little more time to find the right people for the job can save you from backpedaling a year from now.
Balancing rapid success with quality requires intense preparation. Businesses that sacrifice customer service, hire unprofessional employees or lose sight of their original vision risk their integrity and future growth.
By focusing on the infrastructure and resources your venture needs to reach your long-term goals, you avoid rushing into short-lived success.
Yosef Martin is the chief executive of Merchandize Liquidators, a wholesale liquidation company located in Miami, Florida.