How to protect your business from common obstacles facing high growth companies
Imagine traveling down the highway going 90 miles per hour, wind in your hair, sunny skies and a feeling like all is right in the world. Out of nowhere, you see a big object right in your path. You are unsure what to do, where to turn, and if you will make it through the next minute. You make a quick decision, jam the breaks and twist the steering wheel. The result….you are spinning out of control. What happens next is no longer in your hands…or is it?
This situation is an analogy for companies who are struggling to avoid the speed traps and obstacles which catch and divert many fast growing companies. According to Inc. 500, the median growth rate of Inc. 500 companies from 2008 to 2011 was 1436%. For any company experiencing that type of growth, an obstacle in the path could be painful and deadly to the business. Economist Gary Kunkle, notes, “These challenges transcend the industry you’re in, the location you’re in, or the size you are.” No company is 100% safe from these challenges and they can strike at any time. While many companies are unable to withstand these obstacles, those who are aware of and prepared for the challenges create a dynamic structure, well-equipped to handle whatever comes their way.
So what do you need to look out for? An Inc. 500, article titled, “6 Classic Ways to Crash Your Company” listed these 6 challenges that fast growing companies commonly encounter:
1. Your Business Outgrows its Staff
Your staff is great! Or should we say, your staff was great? A group of nice people who helped build your business to a point you thought it would never reach. The skills and attributes you were looking for from employees then however are not what you need now. As much as you want to believe they can do the job, the fact is, sometimes they can’t. Hesitating to make tough staffing decisions could potentially halt all growth and development.
2. You Wait too Long to Hire
Your employees are working around the clock, to them it’s obvious they need help but unfortunately it’s not on the way. Items begin to pile up, calls are not being returned, and the quality begins to become compromised. Top management finally comes to decision, we need help. Between the time it takes to hire, an adjustment period, and steep learning curve the support the new hires bring to the table may be too late.
3. Your Business Lacks the Right System
You know you might not have the right system when clients, prospects and opportunities are falling through the cracks. The workflow is not getting the support it is needed and operations are starting to become a mess. There is no structure, files everywhere and you are rapidly falling behind your competitors in the technology game. Systems can be expensive, and implementation of these softwares can be timely and tricky, so this plan needs extra attention and a team dedicated to see that it gets done efficient and effectively.
4. You Run Out of Money
There is no single thing more eye opening then the day you look at your bank account and see the dreaded $0.00. You are in shock; just a few years ago you had more equity than you thought you would ever need. The growth came so quick, it was spend, spend, spend. New offices, new employees, and new responsibilities. You are busier than ever and the focus shifted away from the finances. By the time you stop the cash burn, you are left with debt and creditors calling.
5. You Can’t Keep Up with Demand
Demand is high…good thing. Unable to meet the demand…bad thing. You want to please the customers, investors, and maximize revenues. To fill the demand, you will need to make an investment in your operation. Whether it’s a new machine, facility or personnel, they all will take a big hit to your checkbook and impact your current operation.
6. The Problem is You
There is nothing more difficult to hear than “the problem is you!” You created and built this business into everything it is today. For any business owner it is difficult to plan long term when dealing with the day to day struggles of operating a company. With a lack of time to plan for the future, you are not properly positioned to strategize for what is around the corner. In some situations, the company may just have outgrown you. At this point, business owners must ask themselves, am I helping or hurting.
RVR Solutions and Capabilities
Growth is a good thing; it is something that you should be aware of, not afraid of. By understanding what some of these obstacles are, you can now begin to prepare for these challenges. In most cases, outside support may be an available option to you. For many business owners, the daily struggling of managing the day to day operations makes it difficult for the company to prepare and strategize for its future. Having the right team (internal or external) around you, should help to eliminate the obstacles that could derail the growth of your business. The best solutions for navigating the challenges synonymous with rapid growth should be centered around having a strong foundation, a management team focused on strategy, and a team and plan capable to overcome these obstacles.
By focusing on these challenges now, you are taking a proactive approach in the management of your company. RVR recognizes these challenges and provides the support and professional expertise to nimbly navigate through them. By protecting your business against these “speed traps” you should be able to reduce the amount of financial and reputational risk facing companies today. Working and aligning ourselves with the interest of your business, RVR delivers the Resources, Value and Results designed to drive the future success of you and your team. For a brief list of the services RVR offers, please look at the list below or contact one of our RVR team members:
Spearheading short and long term strategic development
Providing business advisory services
Building and implementation exit strategy
Evaluating existing or potential business
Performing business risk assessment
Monitoring and managing activity levels of employees
Creating training platforms for new and existing employees
Leading project management for major events
Providing implementation teams to secure the success of your strategy
Supporting CRM system selection and implementation
Guiding business process outsourcing
And much more…
Share Your Story!
Have you or your business faced these challenges? Please share you story in the comments section.