THE BENEFITS OF GROWING YOUR BUSINESS AT THE RIGHT RATE
May 26, 2020
Finding the
right rate of growth for your business is hard at any time - but it's especially challenging during a pandemic. Once you figure it out, you will experience many benefits.
Benefits #1: You likely won't overpay for people
The labor market was extremely strong going in to the COVID-19 crisis. It's likely that businesses aren't going to be able to hire back employees in a big wave, and many may want a different relationship with their business altogether. With that in mind, the whole compensation system may be disrupted. If you are growing at the right rate, don't overpay for people. Hire people who are aligned with where you are trying to go.
Benefit #2: Your hiring plan is easier to execute and less expensive
Understanding your rate of growth helps you decide how to hire, who to hire, when to hire and how much to pay them. I know people who hire in anticipation of what's going to happen or they pay people overtime because they didn't anticipate the growth they were going to have. When you grow at the right rate, this easier to predict and control.
Benefit #3: You don't need equity owners
When entrepreneurs are in high growth phase, they think they must raise capital. Oftentimes, that's a disaster. Most small businesses spend so much time seeking out equity financing that they put themselves out of business. Or they partner with someone who is not aligned with their personal and company values. Instead, you can finance organically with the bank and cash flow. We may be on a different paradigm right now because of COVID-19, and raising equity for old ideas is going to be hard to do. It might be feasible to raise capital for new ideas, such as virus free services or rethinking hospital systems.
Benefits #4: Minimize execution risk
When you are growing at a controlled rate, you can say no to customers or marketing channels that aren't the best fit for your business. It's tricky, but ultimately you can align operation excellence with marketing and sales.
Benefit #5: Thoughtfully plan for physical growth
Pre-COVID, the actual availability of office space was limited, and the space that was available was expensive. Growing at the right rate helps you control your real estate expense and how quickly you want to expand.
Have you experienced benefits from growing your business at the right rate? Share with us on Facebook, LinkedIn and Twitter!
