Contributed article in our business series. Enjoy! – Kimberly
If you’ve been paying close attention to the online startup and business landscape, you will notice a particularly common problem. The problem with a lot of startups is not limited to the lack of growth. Growing too big, too quickly, can also introduce a lot of problems.
This issue is not just the domain of small or new startups either. Larger corporations such as LeEco are known to suffer from the same problem when they start to grow too quickly. In most cases, maintaining steady, but sustainable, growth is always the best way to go. Here’s how you can introduce this type of growth to your online business.
Have a Scalable Business Infrastructure
The infrastructure you use to support your online business needs to be scalable from the start. This means having a scalable server or hosting service, a good merchant account that can be upgraded to handle more transactions, and having a business that is flexible enough to grow in the first place.
Servers should never be an issue. Most hosting services offer a lot of upgrade options that will help you accommodate more traffic. The same can be said for finding a good high volume merchant account to use. Most payment gateways have limits that you must comply with, but there are upgrade options to choose from.
Creating a scalable business, however, is another story. This brings us to our next point, which is…
Knowing When to Expand
At a certain point, you will start to feel the strain of a growing business. There will be more orders than you can process in a timely manner and you will need to consider expanding the team to accommodate them. The tricky part is knowing when to expand.
There is no definitive guide on how to determine the right time to expand, but as a business owner, you can always sense when more employees, better order processing capacity and other expansions are needed. A good sign to spot is when you need more than 24 hours to fulfil orders from a single day.
One thing to avoid is waiting until the business can no longer handle the load. Never wait until you start getting complaints or missing orders before adding new members to the team. On the other hand, you should never jump the gun; not unless you know you have a steady level of growth to support the expansion.
Limit Your Overhead Costs
Under all of these circumstances, always try to stay lean and limit your overhead costs. Production costs – or cost of goods sold (COGS) – can always be managed. Overhead costs, on the other hand, can quickly deplete your capital reserve and make growing further a lot more difficult to do.
Now that you know how to ignite a steady, sustainable growth and anticipate the market, you will have a better time adapting to market changes and letting your business grow. Before you know it, you will have a medium to large company, handling thousands of online orders every day and operating at an optimum capacity.by