Seeing your small business expand is exciting, but it can also be tough. A bigger business usually means more admin and decisions, which can be overwhelming for founders. As an organisation grows, it tends to become harder to manage day-to-day – at least until it has the right processes in place.
What worked for a business in its early days won’t necessarily suit it as it grows. If you have a business that’s growing, you must be willing to adapt. During expansion, many founders revisit how their business is set up, including company registration, as they prepare for the next stage. For example, some sole traders running side hustles may decide to set up a limited company.
In this article, Rapid Formations will share practical tips on how to manage a small business as it matures.
Recognise when your business is outgrowing its early ways of working
Growth happens gradually, making it challenging to pinpoint when a business has outgrown its existing setup. While some people will consider revenue as the main indicator of growth, it can also show up as friction. For example, some tools and processes may no longer suit the scale that you’re operating at, even if your profit margin has only increased modestly. As you grow, admin, compliance, and financial tasks often take longer due to higher transaction volumes and increased reporting requirements. Because of this, it’s worth investing in structured systems and tools that can improve efficiency.
As a founder, it’s important to also look at yourself. Are you becoming a bottleneck for decisions? If you no longer have the time to deal with everything by yourself or you’re struggling when relying on what’s in your head (rather than documented processes), it’s a sign that your business may no longer suit its early setup. You may need to change things, such as formalising your processes so that they scale or hiring people to help.
While change can be daunting, it’s better to adjust as soon as you identify an issue. Recognising that you’re outgrowing your current arrangement can make it easier to accept changes.
Shift from founder-led to process-led decision making
At the start, you might run your business based on instinct – making decisions informally and as fast as you can. However, while your gut feeling may have helped you get your business to where it is today, keeping the same mindset can limit further growth. As you expand, it’s worth considering moving to process-led decision making.
To become more process-led, you need to establish clear responsibilities for yourself and anyone else within the business. For example, who’s in charge of buying new products? If you create decision-making frameworks, you’ll empower everyone to take charge of their decisions consistently, reducing delays and conflict. So, do the new products match all your criteria for range expansion? You want to move away from ad hoc problem solving and impulsive decision making and instead think things through, considering how each move aligns with wider business goals.
Initially, formalising decisions can slow down workflows that were previously handled informally. However, as your business grows, it becomes necessary to increase internal admin, so that decisions stay consistent as more people get involved.
Establish structure around people and roles
Bringing more people into your business changes your day-to-day operations. As you grow, you need to create clear structures.
As you hire people, it’s important to define roles. This includes redefining the roles that you and any other existing colleagues do. You want to avoid overlapping responsibilities, so everyone needs to know who each task belongs to.
It’s also worth establishing reporting lines. Some of you will need to take on management responsibilities to oversee the work of others. Line management is one way you can ensure that everyone adheres to their roles and responsibilities.
Having clear structures in place will help you and the wider team do their jobs more effectively.
Review systems, finances, and compliance
Complexities tend to emerge with growth. To overcome the associated challenges, founders need to regularly review processes.
To help a small business mature with fewer pain points, it’s important to make necessary updates to three operational areas:
- Tools and systems – Spreadsheets and notebooks are unlikely to be enough to stay organised once your small business grows. As you expand, you may need to investigate more collaborative cloud-based systems to manage things like inventory and invoices. You may also want to consider tools that embrace automation so that you can speed up certain tasks.
- Financial oversight – Knowing your profit and expenses is always important for any business of any size. As you get bigger, though, it becomes even more pressing to keep up to date with the latest figures and get an idea of what could come in the months ahead. You may want to invest in accountancy tools and an accountant to help you with budgeting and forecasting.
- Admin and compliance – Statutory responsibilities, filing obligations, and record-keeping requirements can change depending on the legal status of your organisation. For example, limited companies have ongoing obligations such as annual accounts, confirmation statements, and director responsibilities.
While the number of things to consider may sound overwhelming, improving your processes can make day-to-day operations easier to manage. Once you’ve worked out what you need to do, you’ll be in a better place to cope with growth.
Stay true to what already makes the business work
Founders often worry about losing company culture as their business expands. However, there are ways to preserve what a business does best while accepting that some changes have to happen for growth.
One practical way to protect a business’s culture is to document its values. If you can define what the business stands for and record this in a shareable document, you can empower future employees and collaborators to learn about the business’s values and carry them forward.
It’s also valuable to welcome feedback. As you adopt new processes, try taking a moment to hear from everyone (including your customers) to find out if you’re still staying true to what makes the business work. Growth management is an ongoing process, so you need to be willing to make tweaks as you go. You won’t get every change right the first time, and that’s OK. Part of maturing is recognising what level of expansion will work for your business and its values.
How to manage growth with confidence
Seeing your small business grow into a bigger one is something to be proud of. However, growth does come with its challenges. A larger organisation will usually require more management, clearer structures, and a higher volume of formal processes.
Taking the time to formalise key areas of the business early can make growth more sustainable and less stressful. Organisations like Rapid Formations can support founders through their business journey by providing guidance on company formation and ongoing compliance.
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