Managing Growth

How fast should you grow your business: answer, as fast as you can manage it, with the emphasis on ‘manage’. There is no point in trying to create a stratospheric business if you can’t manage it day to day. It’s better to grow less fast and stay in control than to shoot for the stars and explode in space.
As we have discussed, I recommend that meticulous cash management should stop you getting into a syndrome called ‘overtrading,’ where the expansion of your business goes too fast for your cashflow and people resources.  It is very likely that you are in it for the long haul, so take it easy.  Steady growth will get there better than explosive growth if that threatens the foundations of the business.

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Tip from Shaf

If it looks too good to be true, it probably is Look, businesses do sometimes make huge leaps forward, based on a single deal.  But always examine any opportunity to make sure you understand the risks as well as the rewards.
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A large business can turn a small business on its head with one phone call.  You get a call, for example, from BP asking if you would be interested in quoting for a product that will eventually be rolled out to all first line managers, a huge number of people.  During the call the person says, “You are in a bit late, actually, because I did not know of you until I spoke to a new recruit first line manager who said that she had used your product when working for her last company.  Sorry to put pressure on, but I need to brief you in the next couple of days and get your proposal within a week.”

What do you say?
Most people will drop everything for such an opportunity, and on some occasions they would be right to do so. This makes the decision less than straightforward.  In a lot of cases, going from my experience, they would be wrong.  The individual talking  is a middle manager; so you have no contact with top management.  Existing competitors are driving the timescale.  You only have the word of a past user that you can understand and meet the need.  And so it goes on.  It takes real courage to turn down such an opportunity, but almost certainly it is the right thing to do.  Do it positively, of course, saying that this is not the right time for you to meet such strict timescales, and that the speed with which they are acting gives you less than enough time to react to the best of your ability, and so on.  Give good reasons for not going for this one and then ask to meet the person at a later date to discuss their requirements for future projects and make sure you get the name of the person who recommended you so that you can go and see them as well.

The result of such ‘positive qualifying out’ will be an opportunity to get into BP in the future, and also a clear signal whether or not your proposal would be taken seriously.  If the manager remonstrates with you insisting that the recommender had painted a picture of your product that was an exact fit for their requirement, then reluctantly and modestly you can change your mind.  If they just say “OK, thank you for your frankness,” you probably did the right thing.
Again, when you are running a business keep your feet on the ground and don’t expect everything to happen at once