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Don’t Let Hyper-Growth Fool You

By October 16, 2013CMF Blog

Our consulting team has been called in to do work for a few companies experiencing hyper-growth and we have found that, regardless of industry, the signs are similar: exploding sales of existing products through new channels (online) or regions and/or customer acceptance of lateral product innovation. While growth is a standard and important goal for any business owner, there are some decisions to be made as your company gets to that “next level,” and they might not be the easiest decisions to make.

  • Demand Planning – if you find yourself in the midst of trying to process extra demand without the proper resources or support, you could anger new customers or run out of working capital. In order to fulfill the demand, be sure to have a strong, analytically-grounded demand planning and re-forecasting function. If you project this forecast appropriately, you will not find yourself making extra, unexpected investments in production, but will be prepared for the increase in demand.
  • Systems – many businesses experiencing hyper-growth have never had true information (as opposed to data) systems or proper enterprise-wide reporting. It is critical for companies moving to the next level to invest in upgrading IT and reporting systems. (A helpful tip: many mid-tier ERP products have core functionality “out of the box.”)
  • People – perhaps the hardest decisions in hyper-growth companies revolve around personnel – the friend/family member that helped get the Company to its current growth level has been great, but are they prepared to change with the Company into the next phase? If they can’t adapt to the growth or are no longer the right “fit” for the enhanced role, you may have to make some hard decisions about replacing them, or transitioning them to new roles under better management.

Hyper-growth exists in the lower middle-market right now – be sure to stay above water by preparing for these issues so you can enjoy your success.

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