Successfully growing a business means preparing for the risks and challenges that come with expansion. As you scale up your operations, you’ll need to anticipate these challenges, and ensure that you have a strategy for dealing with them – or avoiding them altogether.
While growth is, for the most part, a good thing, it’s also something that requires careful management. In some cases, it’s worth seeking expert advice from specialised consulting services. That said, there are a few basic principles that those running a growing business might adhere to.
Managing Financial Complexity During Growth
The larger your operations, the more complex they might be. In some cases, this complexity can impede your performance. Good forecasting can often make a big difference. For example, if you know exactly how much extra cash a given investment is going to generate, then you’ll be able to make that investment with confidence.
It’s important to consider every relevant factor. For example, businesses over a certain size might face tax considerations that smaller businesses might be able to escape. If your company is generating profits of less than £50,000, then you’ll pay a rate of corporation tax of just 19%. When your profits exceed £250,000, this jumps to the main rate of 25%.
Operational Challenges in Scaling a Business
There are also operational challenges to consider. As your workforce expands, you might find it more difficult to monitor every single employee. This might mean layers of management between those at the top of the business and those at the bottom, which can impede the flow of information from the latter group to the former. Put simply, you’re less likely to be made aware when there’s a problem with the way you’re doing things, especially when this problem is appreciated only by those at the bottom of the business.
For the same reason, it might be difficult to maintain standards for product and service quality, and to optimise your supply chains. Putting in place the right procedures, and getting standards down in writing so that everyone understands them, can be pivotal.
Staying Compliant Amidst Rapid Growth
We’ve already touched on the way that the profitability of your business can influence its exposure to tax. But there are myriad other complexities to consider. Are you reporting your profits promptly? Are you compliant with any special regulations that are specific to your industry, and any governance standards you’ve explicitly committed to?
Staying on the right side of these issues will help to limit your exposure to legal risk, and your vulnerability to fines and reputational damage.
Leveraging Expert Guidance for Sustainable Growth
If you’ve never grown a business before, then it makes sense to bring in expert guidance. There are consulting services that specialise in taxation, quality assurance, and regulatory compliance, many of which can tailor their advice to suit your particular situation.
