Maintaining Reputation through growth

10 March 2015

Five tips for managing and increasing your capacity

When it comes to growing a business, there are a number of areas you need to manage and monitor closely. While most businesses watch their competitors, customers, and cash flow proactively, there is one area often forgotten until reached – capacity.

It’s a familiar story; a business owner focuses on sales to increase cash flow but has not thought about how or when they can deliver all of the new work sourced. As a result, the quality of products or services can be lower or the turnaround longer, affecting their reputation.

To ensure you don’t play the lead role in this tale, here are five tips to help you manage and increase your capacity.

1. Know how much work you can handle

The first step in working out your capacity is to know how much time it takes for you or your staff to produce and deliver the products or services you provide. Then you need to work out how much time you have designated to fulfilling customer work or orders in addition to all of the other operational tasks that keep your business running as usual each working day.

Also look at your current workload, are you servicing all of your clients successfully and meeting their expectations? What is your turnaround time like, are you meeting or stretching deadlines? Are you getting the feedback you normally do or want to? If your answer is no to any of these questions, or if you are already busy, stressed and not coping with the workload, chances are you are at or very close to your capacity.

2. Find ways to streamline

You still need to continue to bring in income so the first step is to look at how you can minimise the time spent in existing tasks. This starts by identifying ways you can streamline and systemise your processes and utilise your current team more effectively.

Also, look at how you can take on new business at your current capacity. It could be a matter of scheduling work a week or two in advance when your capacity has increased or giving a more realistic timeframe on turnaround and delivery to your customers.

3. Revisit your numbers

When you know your what your capacity is, it pays to revisit your numbers. If you are saying yes to work because you need the money, despite not having the time or ability to service expectations, then it could be time to overhaul your pricing and minimise your expenses.

While you may lose some price-focused customers by increasing your prices, you will at least have increased your income at the same capacity. This may also free up additional funds to increase your capacity by hiring more staff or outsourcing.

3. Build a flexible team

Staffing costs can be a massive expense to business owners, and for smaller businesses, a cost they can’t always afford to sustain. With this in mind, look at developing a flexible team that can help you increase capacity through busy times.

Having a trusted group of outsourced professionals on call when you need them, can help you meet your workload and increase your capacity when you need it, without ongoing staffing expenses.

4. Hire smartly

When it comes to hiring staff, give careful consideration to what positions you need to fill first and their roles. While you may need ‘doers’ to increase your capacity immediately, you will also need ‘business generators’ to cover your growing costs and fill your new capacity.

It’s at this point where you need to decide how big and fast you grow and continue to go back through the steps as you discover your new levels of capacity.

Amanda

3 February 2015

How to manage fast growth and maintain your reputation

For many entrepreneurs starting a business comes with the dream of creating a fast growing company that customers love. But as demand grows and sales soar you can suddenly be faced with some very real and different challenges that you may not have planned for in your start-up.

Sometimes all takes is one big customer, one media opportunity or one photo, status or campaign to go viral and you can be faced with a flood of enquiries and sales. To ensure you handle your growth effectively and maintain your reputation along the way here are five points to keep in mind.

1. Streamline

The more you systemise and streamline each task the quicker it will be to complete and the easier it will be to outsource or delegate to new and existing team members as your business grows.

Ideally you want to be systemising from start-up while still keeping your processes fluid enough to grow with you. This will ensure you can grow easily with minimal disruption to your business operations.

2. Delegate

When you are experiencing high growth your time needs to be spent as productively and profitably as possible. Be ruthless with your to-do list and make sure any tasks that aren’t a good use of your time is delegated to another team member or outsourced professional.

3. Manage your cash flow

Staffing and other growth expenses can put significant strain on your cash flow, and if not managed effectively can cost you your business even despite its popularity.

To prevent this, ensure you are receiving regular financial reports so you can prioritise expenses and plan around periods of low cash flow. Also be careful about the staff roles you look to fill first. While you will need support staff to get the tasks done, you will also need sales people to bring in new business to cover your growing expenses.

4. Keep marketing

While stopping your marketing may seem like a good idea during high growth periods, it can drastically affect your cash flow. With increased expenses you need to ensure you have consistent income coming in.

If you are considering stopping or slowing your marketing down, make these decisions based around your sales figures and budget forecast. Know where your leads are coming from as well as your slow periods, lead time and conversion rate.

5. Watch your capacity

To maintain your reputation you need to grow your capacity as your business grows. Make sure you can comfortably service all of your existing customers and exceed their expectations as well as any new customers you bring on board. Your existing customer base really is your gold mine; they are the best source of new business so it is important not to burn them.

Before you bring in new business or say yes to a project, ask yourself “Can I service this customer effectively and provide real value?” if the answer is yes, go for it, if the answer is no, be honest. If the answer is yes but not yet, then book the work in at a later date. While you may lose a sale, think about how much more you could lose if you can’t deliver and they tell people about their bad experience.

How do you manage your business growth?