This post was contributed to VENTUREAPP by Diana Kyser, founder and owner of COO On Demand, a professional services firm providing single point-of-contact outsourced back office services, such as bookkeeping, payroll & HR and operational consulting.
Every entrepreneur fantasizes about off-the-chart growth, but growth can be hard to manage. How can you ensure that your ability to execute doesn’t fall behind your ability to sell? Here are a few things to think about in terms of people, process and systems to help avoid some of the common pitfalls associated with rapid growth.
Are the people you hire today capable of running your business 1-2 years from now? The employees you can attract when you are just starting out are very different from those who will come work for you once your business has taken off. The skills that are required are very different as well. When you’re small, you need generalists – people who can do a little of this and a little of that – flexible people who are good at a lot of things. When you’re growing like crazy and have high volumes, you may be better off with specialists. You may need to replace the person who ran shipping, customer service and human resources with a few people who have deep domain knowledge.
Companies often promote people too fast, and push them beyond their skill set. Just because someone is a great individual contributor doesn’t mean they’d make a great manager. Most people need time and support to develop managerial skills and you don’t want to lose a talented resource just because you promoted them too quickly. Don’t ever be afraid to hire someone smarter than you – if you’re growing quickly you are going to need to surround yourself with the best and brightest available. And if the job isn’t core to your offering, like administration or finance, you might consider outsourcing it.
Part of the reason many of us created a business in the first place was because it was too hard to get things done in a big company. Process can be synonymous with bureaucracy. Finding the right balance between no process (seat of your pants, everything is custom) and overkill (a process for everything) is an art form. In the early days, you don’t need a lot of process because your dedicated early employees ensure high quality is delivered for every customer. If you are at the stage of trying to attract and keep customers, when a customer asks you to do something crazy like deliver them a pizza, you might do it. As you grow, though, you can’t afford to do non-standard one-off requests. It is too hard to maintain consistent quality. Efficiency comes from doing a small number of things well, every single time. In order to grow and scale, you have to be able to operationalize your work – even a simple checklist can ensure that quality standards are being met every time.
Some of the common pitfalls that I see new businesses make are not using automation, taking a short term view, and selecting systems in a vacuum. When you first start out, all of your business transactions and customer data probably can be stored on an excel spreadsheet. But as your company grows and the number of spreadsheets multiply, this system simply will not work. Today there are many cloud applications that are free or inexpensive when you are small, and they allow you to add users and features as you grow. Be sure to look at your entire business and select systems that either already integrate with other applications or allow for integrations through the use of an API. One of the most disruptive events for a growing company is wholesale replacement of systems, so building a strong foundation will ensure that you don’t have to throw away and start again.
Remember this UPS commercial? It is a humorous example of what can happen if your sales grow faster than your operations. Take some time today to begin to plan how your people, processes and systems will scale and grow with you.