Handling growth successfully
While the nirvana for almost every business is never-ending and fast growth, there’s an art to managing a business through the growth stages of its life-cycle. Sometimes excessive demand is the end for a small business and sometimes it is the making of it.
Having access to capital is key
SleepDrops International also faced the welcome but challenging need to source more capital. It goes without saying that business growth is stifled if there’s no access to funding.
Kirsten Taylor, managing director of SleepDrops International Limited has been on the rollcoaster that is a growing business. ‘Business is like a game of snakes and ladders,’ she says. ‘It has its ups and downs but it’s certainly no game.’
When Kirsten started her business she was doing and paying for everything herself to keep costs down. Then she called in family and friends to help and to fund the business. As the business grew, there was cash flow stress and she felt physically unwell. Seeing the irony, Kirsten recalls how she was working really hard to help people deal with stress and tiredness, remedied by using her products, while she was in need to support herself. Kirsten sought help financially from her family – her parents’ retirement fund.
This turned out well and soon the business was gaining media attending and positive feedback as Kirsten invested in radio and magazine advertising which quickly generated overdemand. To keep up with orders, Kirsten approached a fourth source of funding, the bank and she is now at the stage of seeking investors.
For a company aiming to address the problems of stress and lack of sleep in the corporate world, there was plenty of demand within the business during the growth phase.
As a business progresses through the stages of growth, managerial factors become more and more pertinent – the owner’s ability to set goals, his or her operational abilities, managerial ability and strategic ability, all influence the business’ success.
Gaining investment in the business eventually means giving up control
One aspect of managing scaling up in a business is giving up some piece of the business and/or control to investors, Another is getting the right team in place.
Kirsten Taylor advises that owners have to decide what they want the outcome to be.
‘In my last business it was growing fast and needed some money but my family talked me out of giving up some of ‘my pie.’ So I ended up owning 100% of nothing rather than a big chunk of something successful.’
‘In my current business now I want SleepDrops to be available everywhere in the world and I can’t achieve that on my own so there is no conflict. The challenge is around maximizing value for everyone, ‘ says Kirsten.
Once a business takes off, it is imperative to get in place the right staff that will enable the business to grow and who will grow with the business. The owner needs to be able to delegate responsibility effectively with controls on performance and latitude for mistakes.
The growth phase is a pivotal period in a small business’s life. If the organisation is managerially and financially OK, then there is potential to become a big business, or even to attract a buyer.
‘Growth is a real challenge for small business, but where there is a will there is a way.’ Kirsten Taylor exudes. And that could be a mantra for all business.