Managing a small business is significantly greater than managing a growing and expanding business. The same hands on strategy will not work. More delegation; more manpower; and more risks will arise. This 1 of the reasons why most business do not grow out of their small business set-up. Too many business have closed down due to poor risks management – businesses that have been built from zero. All gone due to poor risks management. You need to understand that growing and expanding your business comes with A LOT MORE RISKS.
Growing and expanding your business is hard but definitely worth the trouble. You may have a look at some strategies for growing and expanding your business here https://www.forbes.com/sites/jordandaykin/2018/11/06/growing-and-expanding-your-business/#26f85410d6a6. Regardless of which strategy you may take to expand and grow your business, here are some general risks associated that business owners need to be ready and aware.
1. More Manpower – Management & Employees
Gone are the days where you did everything yourself – Chief Everything Officer (CEO). One of the 1st things you need is to grow your management and employees. You need a good selection process to ensure you have the best with you. Once you have them on board, your Employment Appointment Letter is key to ensure you are able to manage (and fire) your employees in a way that minimizes disruption in your operations. Key management will also have a more detailed Appointment Letter to ensure they give their bests and at the same time, ensure Non-Disclosure, Non-Compete & Non-Solicitation are signed. This is to protect confidential information are not shared outside of the company; they do not compete with your business; and do not “steal” your staff and clients.
2. More Suppliers and Vendors
Growing and expanding your business requires more suppliers and vendors. This requires managing and monitoring those suppliers and vendors to ensure consistent and quality products and services. You may have been able to manage those previously in a small business but it is an impossibility to manage those without a proper Suppliers and Vendors Agreement. You don’t need unnecessary disputes with your suppliers and vendors when you are in the midst of growing your business.
3. More Financial Control
Managing your finances is never more important now (if you haven’t been doing it before as a small business). Where you money does, leakages in your operations will all result in loss. Where previously the amount could be negligible, in a growing and expanding business, even a small amount over time occurring a lot of times will result in massive loss to your business. Ensure you have a good financial adviser. Ensure that there are check and balance in your company finances. Far too many employees committing criminal breach of trust when there is no proper check and balance.
4. Increase in Operations
Increasing operations may include a new office / warehouse and buying new equipment and machinery. Should you be buying, renting or leasing? Is your warehouse compliant to regulations and by-laws? Are you applying for HALAL, JMP, ISO certifications.
5. New Marketing Channels
In order to grow and expand your business, you need new (or increased) marketing channels. This may include new markets or using the licensing or franchise model. Whatever channel you decide to choose, there are certain risks attached to it. New markets will expose you to new and different risks. Using the licensing or franchise model will require Licensing or Franchising Agreements (understanding what licensing or franchise should be your 1st concern).
Managing risks allows you to save costs. Making mistakes costs money and time! Your money and time! Professional advisers are needed when growing and expanding your business. Let the professionals worry and plan for you while you focus on your specialty.