Managing a growth spurt can make or break a business
Goals: Know what you're aiming for. Bruce Hall, director of The Small Business Institute, asks business owners to be clear on what they are targeting and why.
Financial resources: Rhondalynn Korolak, managing director of Imagineering Unlimited, says apart from the start-up, growth spurts are the second-most risky time for a business owner. "Depending on the state of working capital ... growth can often cause the cash flow to get squeezed, which means that even though the business is growing rapidly, there is not enough money available to pay the bills as they are due."
Infrastructure: Do you have the right building blocks to support your growth goals?
Systems: Twelve months since launching Thought Spot PR and Media Connections, Linda Reed-Enever is thankful she put some good systems in place. She says her client spreadsheet was quickly adapted into a customer relationship management (CRM) system as the business grew.
Delegating or outsourcing: If growth means making the transition to running a team, business owners should review how they spend their time, says Hall. "What are the activities that you need to perform that are high payoff? Focus in on them. Then either delegate, outsource or stop doing the rest."
New skills: Mark Fraser, managing director of Sage Strategy Services, says businesses built on the back of an entrepreneur's idea often require additional skills as they grow.
Frequently Asked Questions about this Article…
Focus on a clear set of goals, secure adequate financial resources and working capital, build the right infrastructure, put scalable systems (like a CRM) in place, delegate or outsource low-value tasks, and bring in new skills as the business evolves.
Growth can squeeze working capital — even as revenue rises, there may not be enough cash available to pay bills on time. The article notes growth is one of the riskiest phases after start-up, so businesses need to manage cash flow carefully.
Clear goals tell owners what they are targeting and why, which helps prioritise resources, hiring and investment. According to Bruce Hall of The Small Business Institute, being explicit about targets makes growth more manageable and measurable.
Good systems create repeatable processes and efficiency. The article highlights Linda Reed-Enever’s experience converting a client spreadsheet into a CRM as the business grew — a simple system upgrade that helps manage customers and scale operations.
Investors should look for the right building blocks to support growth — operational capacity, scalable processes and technology — evidence the company can handle higher volumes without breakdowns or excessive cost increases.
Owners should review how they spend their time and focus on high-payoff activities. Tasks that aren’t high value should be delegated, outsourced or stopped so leadership can concentrate on strategy and growth execution, as advised by Bruce Hall.
Businesses founded on an entrepreneur’s idea frequently require additional skills as they scale. Mark Fraser of Sage Strategy Services points out that new capabilities — in management, operations or finance — are commonly needed to sustain growth.
Check for clear growth goals from management, healthy working capital and cash-flow management, evidence of scalable systems (such as CRM adoption), appropriate infrastructure, a plan to delegate or outsource non-core tasks, and signs the company is adding necessary skills or leadership.
Call 1300 880 160
Start a chat
Schedule a call
