All startup owners dream of super fast growth. And to an extent, all successful startups are designed to do just that - expand quickly and reap the rewards. However, the reality for many new businesses is that rapid growth is something of a double-edged sword.
On the one hand, you have an increase in sales, a larger market share, and you are beginning to make a name for yourself. But on the contrary, scaling can be incredibly tough on your business, not to mention expensive.
Don’t underestimate the costs of expansion, and the impact it can have on your ability to keep thriving and surviving. To give you a hand, I’ve put together some practical ideas on how your startup can deal with the costs of rapid growth - and come out the other side with a fruitful and viable business.
Create a budget
The first step is an obvious one, but many startups fail to do it - create a budget. When your business is growing fast, it might not seem necessary to use a budget, but it is nothing shy of essential. Expenses will start to skyrocket when you undergo periods of growth, and tracking them will be vital to your success. A budget will also give you a solid grounding for making financial decisions. You should never make buying decisions on a whim or by intuition alone - everything needs to be backed up by your figures.
Avoid hiring full time
Where possible, hire contractors instead of full-time employees. While experiencing rapid growth can be an exciting time, it might not last - and what happens if things go stale? You could be left with dozens of employees who have nothing to do because your sales have peaked - but they still need to be paid. Using contractors means you only have to pay for the tasks they do - nothing else.
Find the right people
That said, there will be areas of your business that will benefit from taking on full-time employees. As your business grows, costs become a lot more complicated to control. It might be to your advantage to consider hiring a specialist to help you out, as there is a lot you need to think about. For developing relationships with new suppliers, for example, you might find the right type of candidate from a procurement recruitment agency. A supply chain specialist should be able to help you reduce the costs of storing and delivering your products by finding cheaper routes or more efficient means of travel. It's new territory for your startup, and the likelihood is that you won't have anyone on board with the skills and experience you need - never be afraid of hiring talent to fill those gaps.
Trim the fat
When you are just starting out, there will be many processes and systems in your business that you use to great success. However, many of these will become redundant as soon as you start scaling up. It is vital to recognise these systems and processes and dump them once it becomes apparent that they are slowing you down or reducing productivity. As your business upgrades itself, so must you do to the technology and systems that you use.
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