Guest post by Jennifer Foster
If you ask Jon Stein, CEO and founder of Betterment and author of Your Startup Is A Tribe (And Your Customers Are Members, Too), he’ll affirm that leading the fast-paced nature of a newborn business is not for the faint hearted. Assembling the right team of individuals and then striving to maintain an objective company balance while promoting quick growth is a difficult (and sometimes painful) task.
By its very nature every startup business is faced with a rapidly changing environment and entrepreneurs must learn how to adapt quickly. But at the same time, owners must stay true to a disciplined and strategic financial vision to effectively capitalize on opportunities as quickly as they arrive on their doorstep.
Being aware of and prepared for challenges your company may face in its youth will help business owners overcome hurdles and optimize for potential growth.
What initial growing pains can businesses expect?
- Cash flow issues. Rapid or excessive growth can ultimately cause cash flow issues. To grow a company you have expenses such as facility, staff, marketing, IT infrastructure and inventory, not to mention a multitude of other unforeseen expenses. Do you have the cash flow to support this?
- Customer service issues. Fast growth can result in customers not getting the service they want or need due to a small (albeit growing) staff trying their best to respond in a timely manner to customer service questions and problems. Do you have procedures in place?
- Company culture issues. At some point, it’s important to step back and ensure your corporate culture is defined – and expect that it may evolve. Quick growth can result in company culture being lost as new staff members are not familiar with messaging and expectations while management may be too busy “in the business” to take time to share knowledge.
- Staffing issues. Many times startups’ small staffs are expected to cover many clients and wear a multitude of company hats. Keeping an eye on and avoiding staff burnout is crucial. How often do you ask your employees how they’re doing?
As a business owner, how can you be proactive about implementing successful keys to growth and avoid growing pains?
- Plan ahead. Always plan ahead for potential cash needs. It is always easier to borrow money when it is strategically planned and not a crisis.
- Document procedures. Take the time to document and make available to staff standard operating procedures so they have the resources available to learn company culture and be aware of expectations.
- Provide help. Create a workforce plan that includes a mentor program. Plan to match up incoming new employees with a senior staff member that you know and trust has the willingness to teach and share.
- Communicate. Communicate. Communicate. Be consistent about telling your team what you expect of them. Give them the tools they need to perform well and satisfy their clients’ needs as growth escalates; they will be better able to adapt to growth successfully.
- Congratulate. Start-ups usually have relatively small staffs. Have an informal process in place to tell staffers often that they are appreciated and reward your team for a job well done. Although many small companies don’t do it, formal performance reviews are a key means to reward and acknowledge excellent employees.
As the leader of a newer company, don’t sacrifice company vision or neglect to implement some basic business processes. Most start-ups are managed by visionary workhorses who like to see things get done and have the foresight to make it happen. Most, though, are savvy enough to know that they will need other personalities and skill sets to make their dreams become reality.
You may be small today, but small opportunities are often the beginning of great things to come.
Guest Post by Jennifer Foster.