Establish credit lines that grow
Whenever possible, try to establish credit lines that will grow along with the business. For example, in setting up a credit line with your bank, try to get one based on a percentage of your receivables, rather than a static amount. Chances are your credit line will be reviewed by your bank annually and will be subject to ceilings and restrictions. But try to build as much flexibility into your borrowing relationship as you can. This will leave you better equipped to finance fast growth. Also, try to establish credit lines with your trade suppliers as well, lines that grow along with your business.
Add systems and procedures
As your business grows, you won’t be able to spend as much time personally checking over details as you initially did. So set up systems and procedures that assure that your management team and staff are continually making checks in the same manner you would. For example, you might need to set specific product quality control standards. Or maybe you need to set up purchasing procedures. The more your day-to-day business operations are based on company-wide systems and procedures, the more effective growth you will be able to achieve.
Watch non-financial limits
Because money, or specifically the lack of it, is such an overwhelming impediment to growth, it is easy to overlook other issues that may limit your ability to grow. You might feel that your staff, your computer system, your facilities, or some other component of your business is being overtaxed by continuous growth. If so, don’t hesitate to slow down the pace of growth for a while until you feel that component of your operations is running smoothly again. It takes a wise, disciplined manager to hold back on unbridled growth to ensure that the company can continue to deliver quality products in a professional manner.
Use ROI criteria to determine which investments to pursue
Because a fast-growing business often has more profitable options to pursue than it has money, a decision must be made as to which options should be pursued. One way to determine which options offer the best opportunities for success is to select those with the highest return on investment (ROI). A simplified example is that of a store trying to decide which of two different product lines with equal profit margins to carry. Using ROI criteria, the store may decide to carry the product line that sells faster because its money or investment will be tied up for a shorter period of time, giving it a higher return on the investment.
Hire people in batches
It is much more efficient to hire several people at once. Systematically, it makes sense to evaluate your hiring needs, write up job descriptions, post job openings, sort through candidates, conduct interviews, make the hires, and provide new employee orientation for a group of people at one time. This process allows existing managers to limit the amount of time and energy they expend on the hiring process. If this rule isn’t followed, especially in a fast-growth business, hiring will become a seemingly endless procedure that seriously infringes on time better spent on running the business.