There’s no question that the economy is growing. The Washington Post predicted that the U.S. economy would grow by nearly 3 percent in 2018, and the U.S. marked its lowest unemployment rate in 17 years at the end of 2017.
Entrepreneurs are feeling the fiscal love, too: The Global Entrepreneur Indicator by Entrepreneurs’ Organization (EO), released in March 2018, revealed that nearly 83 percent of entrepreneurs worldwide were willing to launch a business in this economic environment, and nearly 65 percent anticipated hiring more staff in 2018. In the U.S., EO found that those numbers were 92 percent and 70 percent, respectively. A full 83 percent of American entrepreneurs expected to see their net profits increase in the coming six months.
So much growth sounds like the injection any venture might need, but not having processes or tools in place to handle a high volume of growth can feel more like a setup for failure. Here’s how entrepreneurs can build companies to handle a high volume of growth without collapsing.
1. Automate or digitize as many processes as possible.
Automation is a huge time and money saver, meaning it’s a great thing for both small and large companies — and it’s an investment that lasts. Forbes reported that 78 percent of leaders free up three hours or more each day, thanks to automation; 53 percent of employees knocked two hours or more off their daily tasks. Forbes then applied those savings to a hypothetical Fortune 500 company with 500 employees; calculating in an average employee salary of $77,000 and an average executive salary of nearly $156,000, the publication found a department could save $4.7 million per year through automation.
That’s not pocket change — it pays to scale and streamline workflows early so they can withstand large numbers of customers and employees later. Entrepreneurs with growing businesses should automate the processes that happen regularly and result in time-consuming work for employees. A good place to start is by automating the beginning of the relationship with a client by using a document-signing platform. Eversign, for example, uses not only a desktop platform, but also a mobile app, to collect legally binding digital signatures.
Next, move on to automating the onboarding process and the processes that manage your company’s deliverables. One thing that workers tend to lament is how long it takes to send emails or notify customers of process changes or specials the business is running. Using a marketing platform with reporting tools, like Ontraport, Hubspot, or one of the other marketing automation tools can enable your team to communicate a message once while sending it to thousands of people, and it can help you pinpoint problems in your existing campaigns and be more productive moving forward.
2. Anticipate future financial needs and prepare for them.
EO found that 27 percent of entrepreneurs had difficulty obtaining the funding they needed, which means entrepreneurs need to create money pipelines before they’re in dire straits. While some entrepreneurs give up equity to scale quickly, most take on debt to accomplish their goals — 40 percent of initial startup capital comes in the form of bank loans.
Growing companies may not need additional capital or cash flow right now, but that can change overnight. Rather than lock themselves into loans that add a debt load to their monthly financials, it makes sense to find financing that’s more flexible and accessible at a moment’s notice. One method is credit cards; while these add debt, the balances can be paid down as quickly or as slowly as a company can manage, and it’s revolving — the access to funds doesn’t go away once it’s paid off.
The same can be said of lines of credit. Like credit cards, these are pre-approved but accessible on a company’s terms, meaning companies aren’t tying themselves to large amounts of debt at the outset. These also replenish and can be paid down over longer periods of time. One option that ties a line of credit and a business card together is small business online lending platform Kabbage, which issues its Kabbage Card and offers access to lines of credit of up to $250,000 so entrepreneurs have funding accessible in their wallets.
3. Hire carefully and thoughtfully.
When companies are growing at a breakneck pace and having trouble keeping up, their natural first instinct is to throw more people at the problem. In fact, businesses in their first five years of existence created 2.2 million jobs in one year alone. But there are real dangers in overhiring: Businesses going through a temporary busy spurt may suddenly have bored employees on their hands weeks later, and not calculating the overhead — insurance, taxes, salary, other benefits — associated with a new employee can create budgetary issues.
It pays to first ask whether automation can solve some of the capacity issues. Determining that, say, issuing invoices could be automated with software that costs $3,000 is a lot cheaper than bringing on a new employee. It will also save another employee the additional burden of managing a new staff member, which is another cost — to productivity and a person’s workload — to consider. If the work really can’t be handled by existing staff, it’s worth investigating temp workers for short-term projects and outsourced companies for long-term ones.
If you ultimately determine you do need to add staff — and that will happen at some point — it’s vital to hire the right people. People who naturally take ownership of their tasks or tackle problem solving will keep you moving at a fast pace and possibly introduce ideas your team wouldn’t have considered otherwise. Flexible employees are also critical to a growing company; these are the people who can quickly shift focus, adopt new technologies, and become jacks-of-all-trades to help a variety of departments.
Growth is great, but it can feel like a burden rather than a blessing when businesses struggle to keep up. By automating processes, acquiring anticipatory funding, and hiring the right people, companies can help fuel their own growth — and the economy’s.