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How To Manage Fast Growth For A Small Business

 August 20, 2015  /  Comments Off on How To Manage Fast Growth For A Small Business

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Fast growth may seem like a good thing for a fledgling or even established business, but it can often be more of a curse than a blessing. When it comes down to it, business growth is a sign that whatever you are doing is working, but it may also be a sign that you need to get things in shape. If you grow too fast, you may have to deal with credit problems and depleted cash flow. Typically, you have to spend much of the money in your coffers to complete your new orders or to meet demand. If you don’t have the cash flow, your business could go under. In fact, many businesses go out of business when demand hits, so you need to be ready. Here is how to manage fast growth for a small business.

How To Manage Fast Growth For A Small Business

  1. Make sure that you are ready – an onslaught of new business means that you need to have your workforce prepared. Not only do you want to regroup, but you may also want to rehire. Moreover, you want to make sure that your warehouse is ready and your suppliers are ready to produce.
  2. Make sure to get a line of credit with your suppliers – if you don’t have a line of credit set up, you may need to find a way to secure one. If not already, your line of credit will become a lifeline. With proof of purchase orders, you can extend the credit to cover all your orders. When the orders are paid, you can begin to pay back the credit. Oftentimes, you can take out a line of credit with the supplier. Then they will produce your product and you will sign an agreement to pay for product after all your receivables are in.
  3. Make sure that you know how other franchises are doing it – if you are a franchise business, you may want to visit FranchiseExpo.com to learn about other franchisees that are dealing with higher demand. Indeed, after a major discount is announced, you may have a line of new customers lined up outside the door. Other franchisees may have dealt with these issues and you may be able to learn a lot.
  4. Make sure that you secure a factor – a factor is basically an investor that gives you the money you need to create your batch of orders. Based on the amount, you pay the factor back, plus interest. In some cases, a factor may be very expensive and the interest rates are high, but it could be a good lifeline if you need the money right away.
  5. Make sure that you update all of your hardware and software – when it comes down to it, you don’t want old software and slow hardware to put a block on your business’s ability to expand. When those phones are ringing off the hook and the traffic is flooding in, you don’t want your systems to crash. In the end, you want your hardware to welcome the new traffic.
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