My Business Is Growing and My Team Can’t Keep Up
A large number of business owners we come across are growing rapidly, and it is creating a new set of challenges. While growth itself is highly sought after, and can be incredibly positive, fast growth can also cause the “wheels to fall off the bus” in a business. Growth creates noise, new complexities, increased volumes and interactions with both customers and vendors. Sadly, we have seen firsthand businesses grow themselves right out of business because they lacked sustainability and visibility to spot large cracks in the foundation before it was too late.
Every small business is unique in where it exists today and where it is headed. What is constant is that eventually, the growth of the business outstrips the business owner’s ability to manage it by feel. And that business owner can only personally touch so many aspects of the business on a consistent basis. Growth just stresses further the reliance on people and systems to sustain it. There are multiple obstacles that can prevent the back end of the business from keeping up with the front end. Understanding the root issues and what you can do to mitigate them could be the difference between sustainability and a roller coaster ride.
Lack of Process and Systems
Many small businesses lack well documented, replicable processes and systems, especially in their financial function. One of the biggest issues with data timeliness is frequent inefficiency. A lack of process results in unclear roles and responsibilities and makes it too easy for other priorities to get in the way, further derailing progress. This can lead to a financial death spiral as the financial function is always faced with a combination of recurring and routine tasks while also being able to keenly tackle annual or infrequent items like tax filings or a workers comp audit. And as transaction volumes grow with a growing business, the snowball can build quickly. Quite simply, once behind, it can be nearly impossible to get and stay caught up. Another common challenge is overreliance on the human brain in the financial function. This is a doubly problematic as in and off itself it can be inefficient as one person can become a frequent bottleneck, but worse still, we see too many businesses where an important financial person leaves and the whole system unravels.
Have you outgrown your technology systems? Most businesses outgrow QuickBooks long before they realize it. And a common patchwork of systems that worked to get you from Point A to Point B no longer works when high growth kicks in. There can be gaps in data, manual data entry or manipulation tasks that chew up time, and an increased risk for manual error. Even if you’ve made the decision to invest in new systems, investing in an ERP without making other changes is highly unlikely to work. ERPs need to be built and configured to the specifications and needs of the business. Without good processes and systems, it is impossible to make any ERP work to its fullest, either an existing or a new one. Proper planning, a thorough needs assessment and an understanding of what the business needs today, and in the future is essential. As a CEO, you won’t and likely can’t know all the processes needed by your sales, operations, and finance function. You can set expectations, however. Ensure all key processes are documented and followed. And enlist experts and resources internally and externally to get multiple sets of eyes on systems and processes to spot gaps and implement best practices.
Outstripped the Current Team’s Capacity
Complexity and sheer volume can quickly overwhelm the current team. Outwardly, it can look like a slow drip. Little delays pop up, then frequent mistakes. Often, they can be small enough for a period of time that these go largely unnoticed. Noise in metrics and reporting, information becomes available too late to use for impactful decision making, or worse, the information is flawed, leading to the possibility of false positives and negatives. Cash, the lifeblood of a business, burns up quickly in periods of high growth. Do you have visibility into cash? And are you carefully managing it? We have seen too many instances where critical areas like accounts receivable can fall woefully behind, leading to billing mistakes, delays in collection, directly hampering cash. The lack of control over monies going out the door can slowly bleed a business. Do you have the ability to reliably forecast cash? You need to. And listen to your team. Most small business owners admittedly understand the financial function, its processes and needs the least of any part of the business. That means you need to ask questions. What is their workload? Create an environment where they can speak up with a yellow flag long before it turns red. Seek help and best practices.
Your Org Structure may be Insufficient
Revenue growth requires great levels and competencies of management. It requires stronger tools and expertise. It also requires greater processing of information. Purchasing, customer service, sales support and most often financial functions are understaffed and not configured properly from a people standpoint to support business growth. Your people org structure likely needs a re-evaluation both in the role requirements and number of team members.
Business often evolves faster than its people. Has the business outgrown one or more team members? This is quite normal. The team that gets you from point A to point B often cannot get you to point C. Especially in the financial function, we too often see feelings of loyalty and trust too heavily outweigh capability. That is a mistake. Can the existing team create and document process? Are they able to supply you with usable information and not just information? Is there just too much volume for the team to keep their arms around? Perhaps a higher-level skill set is needed. Always bear in mind what that could look like. And what is critical here are the right resources, throwing bodies at financial problems, even if volume driven, is rarely the answer. Understand both the skills and bandwidth that are needed to support current and future growth. The good news is, fractional resources are a great option to augment internal ones, when the ideal in-house team is not cost effective, providing the best of both worlds for small businesses.
Successfully navigating growth is always a matter of a toggle, balancing revenue growth with investments in infrastructure. Diving into the “back end” of the business may be the only way to get the answers you need. Sustainable growth, not just growth, is the end goal. And it is achievable for a small business. Get to the disease, not the symptoms, and seek help to diagnose and solve issues where you lack the experience, expertise, or bandwidth to do so at present.
