While growth should be the goal of every business, there can be such a thing as too much growth too quickly. Growth that is uninhibited by key organizational changes and business self-analysis can become too big to manage. PADGETT BUSINESS SERVICES®, your small business tax preparer, has created a two-part guide to the indicators that your business has grown too large. We will provide the warning signs to watch for, and a plan of action you can take for each sign to protect your business.
Warning Sign 1: Crumbling Infrastructure
On the outside, it may look like your business is well-organized, while on the inside chaos reigns. Are there clear lines of communication for employees? Are your processes unnecessarily complicated? Is your project management system only a token? Every business requires clear processes and procedures for all of the functions it performs. A solid infrastructure requires analysis and change as the company grows larger. It must adapt in order to ensure that each employee can have a line of accountability, and to make the business more efficient and organized. Without a good foundation and a supporting structure, the company is sure to topple.
Plan of Action: Analyze and, if necessary, rethink company structure and organization regularly.
Warning Sign 2: Jack Of All Trades
In the beginning, the business had a focused strategy for delivering a specific service or product. But as time goes on and the business becomes larger and busier, it can be easy for a business to try to take on too much and thus lose its essence. This is not to discourage growth or expansion by any means. However, adding too many products or services that are not necessarily related can cause the company to have an unfocused strategy, and, as a result, an inefficient business.
Plan of Action: Before adding new products or services or acquiring other companies, think about how these additions will fit into an integrated solutions approach, and how it will drive sales of your flagship product or service.
Next week, we will continue our series on warning signs your business has grown too large. PADGETT BUSINESS SERVICES® provides small business owners with the expertise they need to make sound financial decisions and avoid errors with their taxes.