While the importance of planning is generally impressed upon companies that want to grow, companies growing exponentially in the current boom economy cannot undervalue the planning process to ensure their growth remains sustainable.Â Â
Growth is generally seen as a positive for any business, but the consequences on businesses processes, systems and infrastructure is often overlooked, leaving many business owners struggling to keep up. Simply, quick growth may mean that some areas of your business will not work as well as they used to or they may not work at all.
A lack of planning for any business means that they can outgrow their infrastructure and instead of continuing to grow, these issues quickly constrain growth, leading ultimately to a loss of sales, poor profitability and a loss of cost effectiveness.
In an economy where the growth trend looks set to continue according, to many economic indicators, an objective analysis of processes, systems and infrastructure in a high growth company is invaluable.
As part of a growing businessâ€™ planning process it is important to have an understanding of any investmentâ€™s impact on cash flow, build an understanding of the businessâ€™ most profitable activities and conduct a â€˜health checkâ€™ of IT systems to ensure they continue to support the business.
Informed business decisions are paramount so that any investment in infrastructure, including warehouses, production equipment or information technology is appropriate to your business needs and its level of growth by delivering real benefits.
Some of the key issues regularly experienced by high growth companies are: overstocked warehouses; new production equipment diverting focus from the bottom line; and computer networks with excessive downtime.
New production equipment
Inadequate planning can have serious cash flow implications when considering the installation of new production equipment.
A lack of planning in financing the initial purchase, working capital shortfalls due to unscheduled downtime, insufficient production lead times, additional material costs and supplementary staffing and training costs are all serious issues.
Businesses need to properly plan the acquisition and implementation processes and consider the potential implications of the investment upon the businessâ€™ bottom line, as a significant infrastructure investment that seems positive can sometimes prove detrimental to the business.
Underestimating your technology
Another planning pitfall can be in the area of computer systems and network problems aggravated by business needs.
Hardware and software that previously supported the business might now hinder performance. This problem has the potential to become a crisis where nothing works and staff and clients become increasingly frustrated.
The obvious solution is a regular â€˜health checkâ€™ of IT systems outlining a roadmap for business solutions for IT and before these issues become real business problems. An independent review of your IT can provide invaluable direction in the management of what can be a very significant investment in money and lost time.