Growing your business doesn’t sound like a negative, but if you find that your business is growing too rapidly, it could be the death knell for an otherwise successful businesses. It’s crucial to avoid outgrowing your capabilities, but understanding those limits is not always easy. Keep an eye out for these warning signs while business is booming, as your organization could be overburdened.
1. Declining Employee Morale & Customer Service
Rapid growth may be sought after for those high up in the company, but for employees who are suddenly facing the prospect of doing more with the same resources, that’s the perfect recipe for a decline in morale, which typically results in declining productivity and customer service quality.
With more clients, it can be tough to continue giving each customer the same level of attention. Employee fatigue and burnout could also lead to more mistakes and dissatisfied customers.Not responding to consumer inquires as timely or being able to take inbound calls as needed, may require bringing on new people.
What to Do About It
Keeping employees happy is essential to running a successful business. An obvious answer is to increase employee compensation, but if that isn’t possible, ensure that employees are not overworked and recognize their contributions. Once your cash flow permits, consider offering bonuses or increasing compensation. If employees are too overwhelmed, consider bringing on new hires.
You have two choices: hire more people or take on less work. Saying no to more work, could mean the long-term success of your company and gaining stability.
2. Leadership is Looking Backward
Management should continue to play a proactive role and continue future planning. If top leadership struggles to keep up with demands and stops paying attention to the long term planning and creative development that fueled the company’s growth in the first place, it is detrimental to the company.
What to Do About It
Trust your employees to complete the work you’ve assigned them and consider using project management software to easily track and manage workflows. The management team should continue to meet for specifically forward-looking meetings. Progressive thinking should constantly be promoted.
Scale with purpose, and only bite off what you can chew.
3. Insufficient Cash Flow
Has cash flow dried up even when business is good? Typically this occurs due to the spending to perform increased demand outweighing what is still being received from the low volume period.
What to Do About It
Saving cash in a growth reserve fund can preserve the liquidity you’ll need when you jump up to the next level and expenses rise along with your business. Overestimate expenses and underestimate revenue so if projections are off, you have a margin of error to work with.
An invoice factoring company can loan you a large percentage of your outstanding balances and actively pursue collections. This will free up some working capital for your business, and take the burden of following up with unpaid accounts off your staff so they can focus on quality service instead.
When your business can’t keep up with the influx of work, inevitably mistakes will be made, and this could eventually escalate to the point of claims being filed. A comprehensive New Mexico Business Insurance program will keep your business covered against a wide range of claims, no matter the size of your operation. As you grow, your risk profile should change, so it is important that you regularly re-assess your insurance coverage to ensure that you are always completely covered.
About Daniels Insurance, Inc.
At Daniels Insurance, Inc., we have a unique understanding of the risks that businesses like yours face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.