QHow can you prepare for scale and massive growth? And how do you handle too much growth at once?
DANNY WONG, BLANK LABEL
AMany companies at one time in their corporate lives deal with a situation where they need to make trade-offs on rapid growth vs. holding the business growth to a more manageable level.
One rule of thumb in fast-growing companies is to plan for 18 months of infrastructure, systems, etc. with trigger points to determine when to spend the money.
The struggle with massive growth is that it seems easy to do on paper, but in reality you need to be careful to not overbuild your capabilities if your growth does not occur.
The reason for the trigger points is to make sure that you demonstrate the need for infrastructure and systems before you actually spend the money.
Any company planning on growing more than 7 percent per month, or about 100 percent per year when 7 percent is compounded, needs to think carefully about its assumptions and challenge them with robust dialogue on both sides of the fence in order to get the key risks out on the table.
This type of risk minimization is key to success in growing companies. If you find yourself growing too fast, then one method to throttle back a business to only so much growth is by limiting the number of sales and operations personnel.
The logic goes that you can only sell as much as the number of sales personnel. So limiting their numbers limits growth. The same is true with operations personnel; however, I usually recommend a little more capacity in operations so that, when a really great deal comes along, you have the extra bandwidth to do the deal.
UNIVERSITY OF ST. THOMAS
OPUS COLLEGE OF BUSINESS