Unmanaged Growth is One of the Greatest Threats to Business Survival

Exciting short term gains including increases in cash, customer base and sales impact your entire business in significant ways. Preparation for growth is key and anticipating how scaling for growth will impact your business will keep your business robust. For production, unmanaged growth can result in product returns due to production errors, missed deadlines due to production capacity overloads or even a complete shut down due to a lack of financial or other resources.

Start with your Strategic Objectives

To properly manage your growth over the long term, it is best to plan for it. Your business systems should be flexible so that as your business grows faster it can handle it. To be effective in the long term your Operational Strategy must guide the design of your production systems.

Maintain quality as a top priority

Quality is typically compromised when a company starts growing too quickly. Make sure you have the appropriate systems in place to establish your minimum levels of quality and a plan of action to increase quality over time. Wardell has some tips to to Avoid Poor Quality Production.

Optimize production to handle quantity

As your sales increase, your customers will expect you to handle their requests with the same speed, accuracy and attention to detail as if they were your only customer. Invest in your future growth, but do so within the limits of a carefully designed budget.  One way is to keep costs down by adding capacity only when necessary while the more expensive tactic is to invest for longer term growth.

Your customer expectation is reliability

The more your business grows, the more promises you make. Increased opportunity to create satisfied customers comes at the cost of creating many more dissatisfied customers if their expectations are not met. The very thing that creates rapid growth will cause rapid demise if not taken care of.

Managed growth is fueled by information

When a business grows the scale of activity is maginified. Managing the details of 5 customers begins to seem simple compared to managing 500. If quality and reliability are to be maintained with few errors, a robust information system is needed to identify needs and issues.

Manage the costs associated with growth

In addition to the more obvious direct costs of production, the wear on equipment, facility needs and management costs could increase as well. Scaling your operations to accommodate growth should look at the return on investment for various decisions.

Prepare for growth

Will many companies dream for growth, few of them plan for the effects a sudden increase demand will have on their company. More customers means more revenue but if not managed correctly inefficiencies and errors can compound with disastrous consequences on the bottom line, existing customers and brand reputation. For more on managing growth you should watch our Entrepreneurial Skills Program.

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