It’s easy for fast growing companies to lose sight of the big picture and the results can be catastrophic.
To help business owners get a better grip on some of the most common lethal missteps, website Inc.com has teamed up with Edward Lowe Foundation economist Gary Kunkle to compile a list of six things fast growing companies need to keep a grip on.
“These challenges transcend the industry you’re in, the location you’re in, or the size you are,” Kunkle tells Inc.com.
The most common pitfalls:
- Your business outgrows its staff: The people and roles that bring early wins aren’t necessarily the people and roles needed to deliver long-term success. Know how to transition people to new skills or help them understand your needs have changed.
- You wait too long to hire: If you’re really feeling the pressure to hire, it may be that you should have brought new people in months ago. Getting people on board before you absolutely need them gives new recruits time to absorb your company’s practices and culture.
- You don’t have the right systems: Installing the right information systems that allow you to manage your business more effectively while you grow is critical, but it’s something even the most experience companies often get wrong.
- You run out of money: It may sound obvious, but there’s a real challenge for fast growing businesses in managing the lag between when they buy the equipment and hire the people they need to deliver on big, new contracts and when the customer starts paying up.
- You can’t keep up with demand: Kunkle identifies demand forecasting as “the most dangerous point for hypergrowth companies” because businesses often need to go into debt to get prepare for sales they expect to come in months’ or even years’ time.
- You lack experience: Many entrepreneurs have a great idea but lack the skills to manage a growing business. Peer networking, mentoring and advisory boards can help owners of fast growing companies get a better grip on how to turn their businesses.
Inc.com has more, including case studies sourced from a survey Kunkle carried out with 600 fast-growing companies in the US state of Pennsylvania.