Economic downturns are a source of significant pain for business owners, people and economies. However boom times – those exciting and heady periods of high financial growth in the economy – can be challenging too.
Boom times are marked by:
- Significant growth in investment
- Productivity increases
- Sales increases
- Wage increases
- Rising demand
Growth and expansion are the order of the day as excitement and optimism prevail. Who would imagine that boom times can threaten business survival as much as any recession?!
Sadly many businesses are not prepared to handle growth and expansion or the pressures of change that accompany a boom. The businesses that were there first might have the hardest time adapting.
Here’s what can happen:
- Staffing issues: Getting and keeping good people is challenging at any time. Things become even more difficult when experienced and reliable employees have their pick of jobs! Pressure on wages, salaries and incentives increases along with the competition for scarce labour. In a prolonged boom, labour rapidly becomes a key constraint to the ability of many businesses to enjoy the growth the boom brings.
- Market overload: Have you seen an increase in competition from companies moving into the marketplace from other cities, other provinces and other countries? They are simply following the money, but for existing businesses in the market, this can create tremendous pressure.
- Overgrown: Rapid growth in sales puts pressure on production capabilities. Systems and processes that were adequate in quieter times, strain under the rush to meet increased demand.
- Is the customer always right: New clients can be demanding, whether they are from another province or across the globe. Customers may ask for services to be delivered in ways that are familiar to them, but foreign to local suppliers. A new business entering a market often attracts its own following of established suppliers, increasing the pressure on the local establishment.
What to do:
1. Be true to your vision: Do you have a strategic plan? Be clear about who you are, what your company stands for, where it is going and what you will or will not do to get there. Review the game plan frequently, updating and adjusting as circumstances change and new opportunities or challenges present themselves.
2. Tune up: Get your systems and procedures well tuned and your operations house in order. This is a prerequisite for scaling for growth in any business. Fine-tuning systems and processes will ensure that when the increased orders start pouring in you are in position to ramp up quickly.
3. Firm financial foundation: Make sure your financial situation is solid and that your financial affairs are in order. Operating lines need to be in place to handle increased volumes of activity. Relationships with financial providers need to be strong.
4. People power: Get the right people on your team and make sure they are in the right roles. Hire wisely and hire ahead of need, build bench strength into your business plans to cover the inevitable attrition due to competition for employees, and to facilitate scaling up rapidly as business grows.
5. Corporate culture: Invest in your people. Make your business the one that everyone wishes they could work for. Think about training, the type of culture your employees will thrive in and how you can make your people care about making your organization succeed.
6. Positivity: Stay enthusiastic and optimistic. If struggling with the challenges of a boom is getting you down, just think of the alternative.
Don Ramage is a TEC Canada Chair in Saskatoon, SK. He is a senior business advisor and certified business coach specializing in helping business owners and leaders reach peak levels of business performance and personal achievement by focusing on improvement opportunities related to sales and revenue growth, team performance, time and priority management and appreciation of business value.