Business

How to grow your company fast!

By Alan Chapman

What does it take to become one of the fastest growing companies in the country, Alan Chapman an Entrepreneur Organisation Melbourne Member and founder of TLC IT Group explains to thinkBIG.

In July 2001 at age 33, Alan Chapman founded TLC IT after working as an IT systems engineer with the Department of Defence. "In the late nineties there was a shortage of IT engineers and it was easy to get started in a new industry," Alan says.

"I started TLC IT because I noticed that the SMB market was not being well serviced."

As the company grew so did the challenges and Alan began to recognise that there were three stages he needed to adhere to experience the type of growth that would see his company enter the BRW fastest Growing Companies list.

Stage 1 was at about six or seven team members.

With six or seven you can still keep control and be hands-on, but it takes a lot of time. It's very difficult to grow a business if you're very busy running it. It's at this stage when your systems start to get stretched and you need to upgrade your processes, procedures and internal documentation. Many companies reach this size and stall as the next stage gets scary," Alan says.

Stage 2 is at about 20 team members.

At this size the business hits another wall, the words corporate governance start appearing and growth strategies start to change. You start bringing administration team members and financial people in and costs go up. At this stage profit can suffer and some sacrifice has to be made for continued growth."

Stage 3 hits in at about 40 team members.

Now you're starting to get serious. At this stage you need an executive team and your job as a business owner is completely different. You must run a team of highly intelligent, strong willed people and keep them focused. Clear vision, purpose and values become very important.

Your company will now require new systems, both operational and financial, to keep it moving. Your corporate governance and risk management policies should be solid and ingrained by now or you will have problems in continuing to grow."

Biggest Issue

According to Alan, one of the biggest issues with fast growth is cash flow. Tight control of cash, backed up by a good relationship with the bank and a smart CFO is critical.

Not all business owners want fast growth, as anything that moves fast is more likely to crash. If your company starts to get the speed wobbles you must slow down and fix the problems, before getting back in the fast lane."

Fast growth in the financial crisis

The financial crisis had a significant impact on Alan's business, with several clients in the financial industry going under resulting in loss of revenue and bad debts. Due to this downturn many of TLC IT's projects have been shelved.

Yet the IT solutions offered have meant that the overall performance of the company has not been too badly affected.

We have gained a significant number of new clients who realised they were spending too much money on IT with their current suppliers and started looking around, whereas if there was no pressure to save money they would just keep paying too much. The danger to companies like us is not the economic climate but the fast change in technology. Fast change is a double edged sword as change creates opportunity, as long as you're not standing still."