The faster you go, the bigger the mess.
Team New Zealand has recently launched their AC75 rocket ship, Te Aihe. It looks like something designed by an Italian super car manufacturer and will probably have the power to match. They anticipate reaching speeds of around 50 knots when up and planing on it’s high-tech foils, which is mind blowing. The only problem is at that kind of speed, things happen real fast and there is limited room for error. If things go wrong, they will go wrong quickly and probably spectacularly.
Managing a fast growing business
The same principles apply in business. The faster your business is growing and trading, the less room for error there is as things can go sideways very quickly. Resources become stretched. Systems that were fine when you were doing just one project after another can’t cope with multiple projects being on the go simultaneously. Decisions become bigger and the time available to make them may actually become shorter. Your time as the CEO of your company becomes more in demand and so you must ensure you spend it wisely and delegate more of the less important tasks. You can run out of cash quite quickly and this can put your company in a very difficult position to meet the day-to-day requirements of staff payroll and paying your subs and suppliers.
Good, basic business practices are still very relevant when managing a fast growing business. They just become much more important and need to be proactively managed, rather than reactively. Rather than only focusing on retrospective numbers in your business: sales, back-costing results, net and gross profit, etc., you also need to try and add in some forward-looking numbers that will give you some idea of what is coming up. Past measures are important, but being able to predict future demand on resources by looking at your future sales pipeline, industry trends, project cash flow demands, etc will enable you to make better decisions to avoid problems and keep the business growing and performing steadily. In yachting terms it’s like keeping an eye out ahead to spot wind shifts and areas of higher pressure so you can adjust your course and put the boat in the right position to take advantages of the conditions. As opposed to looking back at your wake and your competitors too much.
Some extra tips to manage a fast growing business:
- Revisit this article: Cash, The Lifeblood of Your Business and implement some more of the strategies listed.
- Delegate more tasks to ensure you can spend more time on monitoring your business and making the important decisions.
- Optimize your pricing model to maximise cash flow. Not too high, not too low.
- Streamline your operations to improve production flow and minimise waste (of all types)
- Keep a eye on spending and consider lease or rent rather than buying
- Do more planning, rather than reacting when issues arrise. The past will give you indications of likely problems that can come up, so don’t just hope they don’t occur again. Assume they will and develop a plan to either avoid them coming up or how you will deal with them when they do.
- Focus on building better systems to help manage peoples’ actions and make the operation of your business more streamline and automated.
Like sailing on a high performance boat, running a fast growing business can be fun and highly rewarding. It takes a steady hand at the tiller, good systems and a well trained crew to keep the experience a good one, rather than nose diving and crashing out of the race.
For help with managing your fast growing business contact me here and we can have a no obligation discussion about what changes would be helpful to keep you on your winning course.