Hypergrowth is both exciting and scary. If you’re experiencing hypergrowth you’re making more sales, more deals and, ideally, more money. However, you’re also experiencing more risk. There’s a possibility to get ahead of yourself and put too much strain on your employees and your cash flow.
Those who can manage hypergrowth can make the most of this exciting process. If you can’t manage it, you may not experience the increase in revenue you should, and you could even destroy the business. So, how do you take hypergrowth by the horns? Here’s our advice.
Funding Hypergrowth
Adequately funding hypergrowth is critical because managing your cash flow is potentially the most important factor for your business’ success. You suddenly have a ton of new customers. How do you fulfill their orders when your cash flow is limited to your previous size? There are a few solutions:
1. Factoring
The first option is invoice factoring. This is where you hand your new invoices over to a factoring company, which pays you for them immediately. They give you the cash you need to fulfill that order, without having to wait for the customer to pay you. Your cash flow can expand as much as you need it, and only as much as you need it.
2. Loans
Loans are another option. You can get a traditional bank loan, but this is typically inflexible and very time consuming. Are you asking for too much? Then you may have trouble paying the loan back without cutting into profit. Are you asking for too little? Then you may not be able to take full advantage of your hypergrowth.
3. Investors
Start-ups that are experiencing hypergrowth typically look for investors. It’s great if you can find an investor who will back your orders. However, it’s rare. Invoice factoring is a more reliable funding source that can help you mitigate the risk of hypergrowth.
Guiding Your Culture
Other challenges you may face during hypergrowth come from your staff and business culture. One common problem for established companies experiencing B2B or B2C hypergrowth is that the staff are reluctant to change. It may take a lot of work to get staff up to date with new procedures, but also to change their mindset. When possible, replacing key staff, especially those who are responsible for the teams that need to change the most, is a good idea.
Hire Carefully
You may be onboarding new staff not just to replace current staff, but to grow. One big mistake you may make is getting ahead of yourself too quickly. You can’t be sure how long hypergrowth will last, or where you’ll be when it’s over. So, don’t hire based on some future projected size.
If you hire a former CTO of a massive company, but you’re currently 100 people strong, their skills may not translate well to your environment. You’re hobbling yourself, not fulfilling a future need.
Instead, hire flexible, motivated people who have experience with the current size your business is at. Always keep in mind their ability to grow, as your business grows.
Choose J D Factors
J D Factors can help you fund hypergrowth and expand your cash flow as you need it, without getting ahead of yourself. Reach out to us today to learn more.
