Small business owners dealing with rapid growth may be looking for strategies to manage it effectively. In some cases, rapid growth can actually hurt a business by bringing on changes too quickly, such as orders climbing too high for the company to fulfill. Fast growth in a business requires a successful financial strategy, increased cash flow and solid growth planning.

You may find that you lack the cash to cover everyday financial obligations like bills and payroll when your business grows rapidly. Follow our tips for business growth management to keep your finances under control.

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8 Tips for Business Growth Management

Greater production volumes and more customers come with an increase in overhead and personnel requirements, sometimes faster than you anticipated. The tips below can help you manage rapid business growth.

1. Create a Growth Plan and Objectives

Every business, regardless of size, should create a plan to handle growth strategically. To determine your objectives, consider the following questions:

  • How quickly are you hiring?
  • Are you collecting receivables quickly enough?
  • Can your management team handle the growth?
  • How efficient is your production line?
  • Is your inventory in line with your company’s growth?
  • How quickly are you currently expanding?
  • Is your growth making your business more profitable?
  • How well are you managing your cash flow?
  • Do you have the capital necessary to finance your company’s growth?

Analyze how you are managing your business and how you can increase your control over the factors influencing your overhead, assets, inventory and receivables. For example, if your inventory is taking up too much of your company’s cash flow, you will want to take steps to address that.

Analyzing your growth management can help you identify your financing requirements and avoid liquidity issues in the future. Your growth plan should allow you to understand your company’s opportunities and risks.

2. Uncover the Source of Growth

Once you’ve noticed a surge in your business’s growth, determine its source. In some cases, it may stem from a one-time occurrence, such as a single successful project. In other cases, the growth may be from sustainable momentum.

You need to uncover the source of the growth to ensure you can maintain it. For example, if it is coming from a marketing campaign, you will want to continue investing your efforts and resources there. Lean into what is working to keep your company growing sustainably.

determine how much cash you need to sustain growth

3. Determine How Much Cash You Need to Sustain Growth

Once you have determined that your company is growing sustainably and not experiencing one-time or seasonal growth, identify how much cash you need to sustain that growth. Analyze your cash outflow and inflow to forecast your requirements. When you know your future cash requirements, you can assess your company’s current financial situation and determine whether you need to make improvements. You may be able to convert unused assets to cash, restructure debt or obtain additional financing for more working capita