With a third of entrepreneurs making growth a top priority in 2013, small business optimism is a bright spot amid ongoing economic uncertainties. Entrepreneurs' confidence rose to 86 percent in the third quarter, according to the Ewing Marion Kauffman Foundation.
For sustainable growth, however, that confidence needs to be supported by careful and strategic planning, experts say. Many growing businesses falter because they expand too rapidly, and lack the resources they need to meet growing demands.
Companies can grow responsibly without over-hiring by keeping an eye on trends in their particular industries and communities to understand the most relevant customer traffic, says Tameka Montgomery, Associate Administrator of the Office of Entrepreneurial Development at the U.S. Small Business Administration (SBA). It's also important to consider long-term impacts of those trends rather than reacting to short-term impulses. "If you can be forward-looking and strategic in your approach, as opposed to just being harried and frenetic, you can have better long-term sustainability," she says.
One danger of expanding too fast is inconsistent service delivery. "One factor that makes a small business successful is its ability to provide high quality service to its customers," Montgomery says. Companies that aren't prepared for fast growth and can't consistently deliver quality goods and services will challenge customers' confidence in their business, she adds.
Richard Lewis, Founder and CEO of Denver-based RTL Networks, Inc., has turned down contracts that his technology and energy solutions business couldn't successfully fulfill. "I've never shied away from growing too fast, but I'm always aware of the limitations of our delivery infrastructure," he says.
"We don't want to be in a situation where we win a contract and can't get everyone on board by the start date," Lewis adds. "My advice is to have honest introspection on the ability of your company to deliver."
Lewis turned his 11-year business into one of the country's fastest growing companies by considering his future growth opportunities from day one.. "From the very first contract and the very first employee, I constantly looked at everything as how will it work when we have a hundred contracts or a hundred employees," he said.
RTL recently grew from 85 to 135 employees with the launch of the company's new energy division. Today, as RTL considers contracts involving 20 to 30 employees, it still relies on business processes learned from Lewis' experiences working for big corporations and the military to make successful growth decisions.
"It's one thing to win a contract," Lewis says. "It's another thing to win a contract and have a system or process to measure how far that contract gets you toward a goal."
Source: Huffington Post | Lisa Wirthman