Two and a half years later, Babylicious has already beaten the odds and is well on its way to becoming an institution in the world of baby gear. Here are several lessons learned that apply to any small business facing rapid growth.
Lesson One: Join a 12-step Group
Just kidding, but you do need to have a solid understanding of the support group you'll need to take your business to the next level. Your supporters— your advisory team, financiers, Board of Directors, management team, as well as your business and personal networks— will help you ride the challenges you'll face, especially during times of growth.
When you develop your strategic growth plan you must take the time to ensure you have buy-in from key stakeholders. In the case of Babylicious, Barkley continuously consulted with her investors and her advisory team in this capacity. As a result, she was better equipped to meet unexpected challenges like sudden financial needs. Her support group was on board.
Unprepared business owners can find themselves in perilous situations that could have been avoided, such as an influx of orders threatening to outpace the company's ability to fulfill them, or not enough cash on hand to maintain a rapidly diminishing inventory. It's much harder to address situations like these after the fact than it is to invest a little time into your strategy up front. Recent technologies such as on-line shopping mean that a business can literally become an overnight success, but only if it's properly equipped to meet the challenges that come with instant popularity.
It's also very important to know who you can leverage for resources. Time and time again I meet business owners who have found their solutions through their personal and business networks. Babylicious owner Tina Barkley is no exception, her networks served to provide her with the answers to her two most pressing issues- financing and warehousing.
Lesson 2: Know your business and prepare for the occasional "bounce back"
To effectively manage growth, you need to understand your business thoroughly yet remain flexible to required changes.
It's important as a small business owner that you are rigorous about understanding every aspect of your businesses operations, finances and key accounts. You should be able to answer the tough questions, such as what kind of culture are you trying to develop? Who is your target market? How much cash do you need in order to grow? How are your sales systems functioning? What is the turnaround time for orders? And so forth. Questions like these will help you sort out the areas of your business you may need help with.
As a manager, your objective should be to focus on what you're good at, and then delegate or outsource everything else. For example, even if you have a handle on your finances, you'll likely still want to hire a good accountant. You may have creative flair, but decide hiring a graphic designer to design your marketing materials is more effective. No matter how you decide to outsource, continue to keep a firm understanding of the systems upon which the foundation of your business is operating. Especially during times of growth because you'll likely need to access or change these core systems rapidly to meet challenges.
Remaining flexible to change was critical to the growth of Babylicious. Like every business, Babylicious needed to try a few different approaches which required some "bouncing back". For example, in its early stages the company split its inventory between two warehouses in both Canada and the US, quickly discovered this was a premature move, and went back to a Canadian warehouse only. Quick recovery ensured minimal loss.
Another key to flexibility is systemization. This may sound a little contradictory at first, but only when things are done according to a plan, can they be altered with any certainty. In other words, a lack of organization does not lead to flexibility, it leads to chaos. And if a business is allowed to grow too rapidly in a chaotic state, it cannot adapt and ultimately collapses. On the other hand, systemization makes it possible for a growing company to "turn on a dime".
