If you have not already picked up your copy of the September issue of Inc. magazine, then I would encourage you to do so. It is a special double issue that features the 31st annual listing of the 500 fastest growing companies ( Incidentally, our firm, B2B CFO®, made the Inc. 5000 list for the third year in a row).
In this issue, there is an article entitled “Speed Traps”. The author mentions six speed traps that await every fast growing company. What is very obvious to me as I read the article are recurring challenges that I have encountered working with fast growing companies and their CEO’s. These are challenges that must be overcome if any company is to reach a higher level of success. They are:
- The right people must be in place or the current staff must grow and expand their skills and knowledge. As a business grows the challenges become greater and more varied. The talent must be in place that can adequately meet the inevitable problems that will arise. This is particularly true regarding supervisory or management personnel. The people in these positions are absolutely crucial if the company is to achieve a higher level. People skills become paramount for those in management roles. My recommendation is to carefully assess anyone being considered for a management position. As a part of your evaluation process I even recommend an appropriate testing procedure. Joe Thompson at Pinpoint Profiles (http://pinpointprofiles.net/index.php) can be of great value in this process.
- An adequate system for the specific industry must be implemented with the people fully trained to use the system. I cannot begin to tell you the companies I begin working with that simply did not have the correct software system in place to adequately measure and manage their business. Manufacturing companies need a system devoted to the manufacturing process. Construction companies need systems that capture and track the appropriate revenues and costs so the CEO can know if the jobs are profitable and react accordingly. This is the case with each unique industry with many fast growing companies. Without the right system, a CEO may operate their company under an illusion which is extremely dangerous.
- Adequate cash must be maintained at all times. Liquidity is crucial for all companies but especially for fast growing companies. Even profitable companies can go broke without solid cash flow. Cash must be continually forecasted and needs planned for before a crisis.
Having a fast growing company is a wonderful and exciting time for everyone involved if the growth is controlled with the right people, systems, and an adequate cash balance.