Business growth management

Growth is essential for any business; if you don’t grow, you lose ground to your competitors. Why is growth important for a company? Growth can bring efficiencies to your business, in some cases you will have the ability to better utilize your workforce. Other benefits provided by growth are additional profits that can be used to increase business costs year after year, such as employee salaries, utilities, etc. Depending on your line of business, you may be affected differently than a business in another industry.

There are also downsides to business growth that can make a business less profitable and even destroy it altogether. Rapid expansion carries the risk of making your business unmanageable, more expensive, and less efficient. Depending on your business, the difference between growing 10% and 25% may require you to double your workforce, as you won’t be able to use your existing workforce to take on this new rapid growth. Additionally, all of this rapid growth in your workforce may require larger workspaces as well as additional administrative staff. Growth can also tie up cash, especially if you have to invest in equipment or move to a larger location.

Hopefully you are starting to see how such a move can erode your gains. This article is not to discourage you from seeking to grow your business, I just recommend that you do your due diligence when faced with this possibility. Rapid growth can have a tremendous impact on your business and the quality of your service or product. To analyze your capacity for growth, consider the following:

• Determine your downtime rate by dividing your downtime by the total hours paid to your employees directly related to generating revenue.
• The downtime rate will not only help you determine how efficiently you are using your workforce, but it will also give you an idea of ​​how much additional growth the existing workforce can handle.
• If growth is possible for your current workforce to absorb, can it continue to deliver with the same quality, or will quality suffer as your employees are expected to work harder?
• Your business structure to support this new rapid growth plays a very important role. Determine if you have sufficient administrative staff and required work space.
• Determine additional capital expenditures required relative to growth opportunities, rapid expansion will tie up a large amount of your capital, which can impact the entire business.

Simply put, business growth is vital, it can make your business a competitive, efficient and profitable force. However, the level of growth depends entirely on your type of business, the ability of your workforce, financial resources, and the overall structure of the business. The slightest miscalculation can get you into trouble very quickly and bring your business to the ground.