Scaling up in times of economic growth
Whilst there are still mixed reports about economic progression and its rate, the general consensus is that things are improving and certainly moving in the right direction. Indeed, many sectors are seeing a real upturn and as a result many are experiencing growth, or wanting to capitalise on growth opportunities.
But taking the plunge can certainly be a big concern and there are lots of factors to take into consideration. Whilst gaining a new contract is great for the additional income and an indicator of growth potential, real thought needs to go into resource planning to ensure that the work can be fulfilled. Whether that involves the employment of extra staff, a good cash flow to buy materials or equipment, or looking into flexible resource options such as freelance help – all of those elements need to be planned. Over or under-resourcing can be detrimental to the business – and not fulfilling the work requirements can be detrimental to the reputation of the business going forward.
Funding is of course always a key consideration and ensuring that the company can access finance to fund the growth is crucial. The business will need to find a way to fund the extra elements needed – which is usually just a ‘bridging’ period until the additional income from the additional work starts to roll in. Banks are an obvious source of lending, but for bridging loans, businesses could even look to friends and family.
In a period of growth, it is always advisable to keep a closer eye on the accounts than usual. It goes without saying that regularly reviewing accounts helps the smooth running of the business and helps to highlight any issues or forewarn of potential problems – but in a growth period even more so. It can be easy to get into the day-to-day management duties and lose sight of the accounts – not identifying problems or potential issues until it is too late.
Where possible or financially feasible, consider professional help. Whilst businesses in a crucial growth phase might want to reign in costs wherever possible, professional advice at the right time can make a world of different and be worth its weight in gold. Professionals can often spot opportunities or pitfalls with more ease and help with solutions that can save the day. We have seen many companies benefit greatly from our Board Support package, for instance, gaining good advice on tap for a fixed-fee and helping them on the road to success.