We’re often so busy try to figure out how to get successful that we forget certain other considerations. Namely, what to do when you’re actually there. It’s something you need to be prepared for, even if it’s not right around the corner. You need some kind of “success plan”; a way to make the scaling up of your business feasible. You think all those people who climbed Mount Everest went up there without knowing how to deal with the situation safely once they were up there? (Well, sure, some of them didn’t plan ahead. And their story, y’know, didn’t end very well. Basically, plan ahead and don’t make the same mistake!)
Let’s say you’re running your small business as usual. Things are going pretty well. You didn’t know if you’d make enough money or get enough business to hire all the employees you currently have. But you did it. In fact, your office is nearly full. The numbers are looking just right. All of a sudden, you end up pleasing the right person. Maybe you gave Oprah really great customer service without even realising it was her. Or maybe your new marketing campaign video is going viral faster than you thought. All of a sudden, you appear on news sites. Or maybe on Oprah’s show. Whatever it is, business suddenly starts pouring in. Overnight, demand went up. The need to have more people there, more room, more resources, faster Internet – it all happens at once. Without a strong “scaling up” plan, your company becomes overwhelmed. This big success turns out to be not quite as sexy as you thought it would be.
So, how ready are you for such an event? The first thing you should check is your finances. Perhaps you’re already pulling in a tidy revenue. Maybe you’ve even got piles of profit that you’ve been pouring into savings. Business 101 does dictate that you should have a good amount of cash ready for eventualities. Success isn’t always seen as one of those potentially dangerous eventualities. But when you suddenly get more business you will need to expand. And to do that, you’ll need money.
Obviously, the best solution is to have the necessary funds in savings already. The mistake that many companies make here is the assumption that the success will pay for itself. In a sense, this is true. But it may not go as smoothly as you’d hope. If you get an influx of customers, then you get an influx of revenue, right? But in order to serve those added customers adequately, you need to have your product and your premises ready. And that requires spending money you should already have as opposed to money you’re going to get. Otherwise, you risk not being able to serve your customers to the best of your ability.
If you don’t feel confident that you have enough savings, then you should consider getting a loan. Of course getting a loan right not may seem premature to you. It’s certainly not a terrible idea; many lenders will be fine with lending you money just for the sake of keeping it for the nebulous future. But a wiser decision may be to make sure you’re financially secure (and sensible) enough to be able to get a loan if something happens. The best way to do this is to get your credit score checked. You can do this from an independent financial records checker. You could also get a check done by the lender you would be most comfortable using if something happens.
The aim here is to make sure that your credit score is strong enough to apply for a loan. Of course, something could happen between now and the loan requirement that would affect your credit score. This isn’t so much about checking if your credit score is good as it is making sure your credit score isn’t bad. If it is bad, you need to take action right away. If your company has a financial controller, speak to them about it. You may want to work with a credit repair company to ensure you can get your credit score looking healthy again as soon as possible. Once the issue is resolved, keep up the good financial behaviour. If a storm of success begins brewing on the sea and you need a loan to strengthen your ship, the ride to the nearest loan will be smoother with good credit.
So what exactly are these dangers I’m talking about here? What parts of your business ship do you need to strengthen, exactly? Well, perhaps the most obvious example is your inventory. If demand sees a sharp spike, you need to be able to produce more of that product very quickly. You don’t want a flood of new customers hitting an “out of stock” notification and having to wait weeks for renewed availability, right? That’s just going to put them off. They’ll turn away and possibly forget about the whole thing.
And let’s say you’re selling your product on the Internet. Or maybe that the product itself is dependent on an Internet connection. An online multiplayer video game or a news website, for example. Your infrastructure needs to be able to handle all that activity. You don’t want your website crashing when so many eyes are on you! So you need to have the means to upgrade your servers at a moment’s notice.
The waves of success can be tumultuous. In reality, you probably cannot be completely prepared for it. If you have a sudden flood of customers coming at you left, right and centre, then no amount of planning is going to stop it from being a rocky ride. But you should prepare as much as you can. Such success is obviously, in and of itself, a great thing. But there are risks that come with it. Look at the story of American Giant. They make clothes – apparently, very nice ones. Or, at least, that’s what an article in Slate implied when it referred to American Giant’s new hoodie as “the greatest hoodie ever made”. Strong words. And they had an immediate, brilliant, devastating effect. The company went from “slow, steady growth” to having zero stock for the Christmas season. Sure, it’s because they sold it all. But imagine if they’d been better prepared! If they had made sure their stock couldn’t fall to zero, the success would have been even juicier. And, of course, more profitable. Thankfully, it didn’t cause them to collapse entirely. But they were in the danger zone at an extremely important time of the year!
So remember: it’s not just failure that can be catastrophic! Be prepared for the sting of sweet success, too.