Growing, Growing, Grown
You purchase an indoor plant in a 4-inch pot and apply tender loving care. Soon it has outgrown the 4-inch pot and needs a bigger one. The impulse is that because it grew so fast in the 4-inch pot it is ready for a much larger 12-inch home. After transplanting, the once lush plant begins to fade in its new spacious environment. Green leaves start to have black edges along with sickly yellow leaves that look blah. The problem is that the plant couldn’t use double the resources that the large planter provided.
A business, whether a startup or one that has continually grown year after year, is like a starter plant. It doesn’t need the largest pot; it needs the next size pot where it can continue its steady growth. A thriving houseplant in a 4-inch pot needs to spend some time in a 6-inch, and 8-inch pot before it is ready for a larger one. A business that has grown into a successful enterprise doesn’t need to immediately double its space, employees, infrastructure, or inventory. It needs to be controlled, planned growth.
Don’t Double the Overhead
For any business, a 10-20% growth is a success by any measure. It does not however warrant a 25% increase in employees, space, and inventory. Adding to the overhead by more than half the growth rate can put a hex on continued growth. Every business should have a growth plan in place, not one that is written in stone but one that is adaptable, expandable, and flexible.
Expansion should take place where it is needed, not across the board. If the shipping department is having trouble keeping up with orders, it’s not the sales department or office space that needs to be expanded, it’s the shipping department that needs the help. It may not always be more employees; it could be a more efficient system or bringing on board a company that specializes in shipping.
Growth plans need to have options. A team that works in unison and has successfully driven the growth to the point of expansion, may not work the same way when new team players are added.
Adding team players and space should never exceed the rate of growth. Outsourcing to professionals is an option that all companies, no matter their size and growth rate, use in the new economy. Every business needs to live by the mottos of one size does not fit all and bigger isn’t always better.
Flourish and Grow, Don’t Grow and Wilt
The economy of scale is an important rule to remember for every company. Whether growing by extraordinary percentages or topping out at a growth rate that is mirroring the GDP, use flexible resources to manage costs. Many services can be outsourced less expensively than in-house employees. A professional office cleaning service is less expensive than having a cleaning staff.
A growth plan should look at what services can be outsourced with better results at a lower overhead. In today’s new economy, it is imperative to have a branding plan. An online presence is all but essential to almost every business and a social media manager is vital to outreach. Every company doesn’t need to have a full-time SEO expert, web designer, social media manager, or branding expert. These are all vital to growth, and all can be outsourced to professionals.
When growth is controlled and matched with necessary resources it will flourish. However, just like the potted plant, if the planter is too big the lush green plant will be out of its environment and wilt.
Hands-on owners and founders need to accept the fact that as the company grows, their time will become fragmented and they can no longer control everything, every minute. Learning to delegate is essential, Richard Branson, founder of Virgin Airlines had it right when he said, “Delegate and Let go.”
Companies that flourish have leadership that has learned the art of delegation. In an economy where specialists abound in IT, Branding, Social Media and Promotional Experts delegating is key to controlling costs while growing.
