Business leaders across the country are focused on overcoming the onslaught of challenges brought on by COVID-19. For many, it was a revelation of strengths and weaknesses. Others with more adaptable business models may have been able to weather the storm and come back poised for growth — but not so fast. Literally.
As business gets back on track and your phone starts ringing again, you may be thinking ahead about expansion plans. Perhaps you’d started some acquisition due diligence before the pandemic hit. Or a quarantine brainstorm has you exploring a product line extension or new service offering.
Keep in mind, the world has changed, and reopening and expanding all at once may not be very realistic. Set a timeline, prioritize your most important actions and be wary of these six mistakes before taking the plunge:
#1 Not prioritizing your spending wisely
If expansion is the ultimate goal, you need to get your ducks in a row ASAP. While investing in hiring and staff training may be a priority, chances are inventory may also need to be purchased, and your marketing budget may need a boost to get things off the ground. Put the money where it’s needed most now.
#2 Letting quality suffer
You’re ramped up and ready to spring back into action. But as your business becomes fixated on quantity — whether it’s servicing more customers or increasing production to keep cash coming in — it’s easy to let quality fall to the wayside. Keep in mind that first and foremost, you’re in business to provide superior products and services. If buyers lose faith, you may have a hard time repairing the damage.
#3 Not having enough cash on hand
As you’re growing, you may find that spending starts to outweigh revenue. Just because money is coming in the door doesn’t mean you can’t suffer from cash flow problems. These days, budgeting and accurate cash flow projections are more crucial than ever before.
#4 Dropping the ball on customer service
Customer expectations may be somewhat unrealistic if they’re looking for the same pre-pandemic level of service, especially in hard-hit sectors like hospitality or personal care services. If you don’t have the staff to handle a sudden flood of calls, inquiries and orders or appointments, your customers may not be as forgiving as you’d like. Planning and communication go a long way in managing buyer expectations.
#5 Putting all your eggs in one basket
Companies on a path toward growth can set themselves up for failure by depending on one particular customer, vendor or employee for the majority of their success. The truth is, your employee of the month may be one job offer away from working for the competition. Plus, vendors you relied on prior to the pandemic may not be in the position to immediately support your business at the same volume.
#6 Not scaling your technology
Every growing business needs technology that can grow with it, ensuring all systems and processes are running efficiently. From data storage solutions to cloud-based applications, what does your business need now, and what technology may it require down the line? Consider the increase in remote working that you may have adopted in recent months. Do you have the technology to sustain this model and add more employees to the mix if necessary? Don’t invest in solutions that aren’t going to serve your size, goals and budget for the future.
The tortoise or the hare?
Sometimes, in the race to grow, it’s better to step back and take your time to the finish line — especially now as your business settles into the new normal. You want to avoid costly mistakes that can hurt your business and set you back even further. Not sure where to start? At NJ CPA firm Magone & Company, we can help you plan for a growth strategy that sets you up for long-term success. Reach out to us today at (973) 301-2300.