Keeping Up With Fast Business Growth | How to Mitigate Legal Risks
When I talk to small business owners, a common theme emerges: the desire for growth. Many start their ventures with skill, passion, and drive, and they take the right steps by seeking support and setting up their businesses properly. However, the journey of business growth can be unpredictable. Since I started this business in 2019, I've witnessed a variety of growth stories, some ending in success and long-term sustainability, and others in financial and operational hardship.
The difference often lies in the sustainability of their growth. Fast growth can strain a business's infrastructure and resources, leading to significant challenges.
So, drawing from what I have seen in both this business, and my just over 20-year legal career, here are my five tips for navigating fast business growth to ensure long-term, sustainable success:
1. Ensure You Have the Right Business Infrastructure
Rapid growth can put immense pressure on your business's infrastructure if it's not set up correctly. This includes your people, skills, services, digital marketing, bookkeeping, financial management, and advisory team. It is so important to take a moment to assess all the moving parts of your business and ensure that everything is in place.
A solid infrastructure means having the right systems, processes, and people in place to handle the increased demand. Without this, your business can quickly become unstable. Think of your business as a machine with many cogs; each part needs to be in the right place and functioning correctly to ensure smooth operation and sustainable growth.
2. Manage Your Finances Effectively
Financial management is crucial for any business, especially during periods of growth. Cash flow is the cornerstone of every small business — this we all know. It may seem obvious to say that with growth comes increased revenue, but what is often overlooked (particularly in the early stages of fast business growth), is that with growth comes increased expenses and liabilities.
Managing both sides of the coin here requires a strong bookkeeping and accounting team. There’s no other way to handle this effectively.
A bookkeeper will help you manage your books and records, cash flow projections, increased tax obligations, expenses and invoices. An accountant can guide you in making informed decisions about tax planning and investments and can tie this into your long-term vision for the business. Together, this stellar duo work with you to ensure your finances and cash-flow are in order and that you're making aligned decisions.
Remember, just because you CAN do something doesn’t mean you SHOULD. So, just because you can manage your accounts doesn't mean you should. Focus on your strengths and be intentional about working in your zone of genius in your business and outsource the rest to the experts.
3. Develop Solid Processes and Systems
Growth will test your business's processes and systems. Without solid foundations, cracks will appear, and your business operations can become compromised. It's crucial to have robust processes and systems for client engagement, onboarding, service delivery, invoicing, revenue tracking, and expense management.
Evaluate your current processes and systems to ensure they can handle increased volume and demand during times of fast business growth. Consistent execution of these processes is key to maintaining stability and efficiency during growth periods. If you're unsure about the strength of your systems, consult with your accountant and business lawyer to make necessary adjustments or develop new ones.
4. Focus on Team Acquisition and Retention
Again, it may seem obvious, but it’s so important — your team is vital to your business' success, especially during periods of fast business growth. Ensure you have the right people with the necessary skills to support your business' needs. This includes both employees and contractors who can bring specialised skills to your business.
Attracting and retaining the right talent is crucial for long-term sustainability. Taking the time to have a long, hard look at who you have in your team and assess their suitability, strengths, weaknesses, and long-term viability is key. This will help you keep things real and will help identify any gaps that need to be filled. Having the right people in place can go a long way to setting your business up to handle fast business growth.
5. Keep Up with Contracts and Agreements
During periods of fast business growth, it's easy to overlook the importance of contracts and agreements. I hear this all the time, and honestly, I get it. However, your agreements and contracts are critical for sustainable success because they maintain clear expectations for all parties (clients, employees, contractors, suppliers), and they play a critical role in protecting your business. Ensure that you have up-to-date contracts and agreements in your business and take the time to review and update these annually or when things are changing (and this goes for your employment agreements, contractor agreements, supplier contracts and client service agreements).
By focusing on these five areas — business infrastructure, financial management, processes and systems, team acquisition and retention, and contracts and agreements — you can reduce your risk in business and avoid becoming a statistic of failure after a period of fast business growth. We’ve all heard the stories of businesses that catapult to success only to fail not long after. That doesn’t have to be the case, and it doesn’t have to be you.
Remember, there's no substitute for preparation. By taking the time to set your business up properly, you can navigate fast business growth successfully and sustainably and ensure that your business is around in years to come to tell the story of your journey.
I talk more about this topic in Episode #173 of the Rise Up in Business podcast My Top 5 Tips For Navigating Fast Business Growth.
If you would like some support and guidance as you prepare to navigate a growth period in your business, be sure to reach out here and let’s make a time to chat. I would love to hear from you.
