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Whether it be the back-office functions, IT, employee skill sets or culture, make sure the critical elements that are the foundation for your company stay strong as your company grows. In other words, grow your foundation so that it continues to support your growing business. Charley Hale, CFO of FCX Performance, an acquisitive distributor of flow control products, said his company, which has grown quickly over the past five years, has beefed up the business in areas such as finance and accounting, as well as HR. His IT department has also grown more sophisticated.
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“It’s really those back-office functions that have had to develop very quickly. You go from a small company that’s borrowing a nominal amount of money to a sophisticated capital structure. Information flow and the ability to produce timely financial information is critical,” he says in the 2012 Wholesale Distribution M&A Update, a recent MDM Webcast.
FCX has also added a training director, as well as a college recruiting and development specialist.
As Al Bates of Profit Planning Group says in Five Profit Drivers Critical to Growth, growing too fast can be worse than growing too slow if it drains the company’s capital, stretches employees and strains relationships with your suppliers and customers because of your inability to provide the service levels you could when you were smaller. Putting a plan into place to help facilitate growth can mitigate these issues and result in a much more strategic growth.
Fast-growing MSCO Inc., a 2012 MDM Market Mover, also recognizes the challenges that come with growth. It tries to focus on culture as a consistent piece of the puzzle. “That’s a big challenge for us going forward. We’re looking every day for talented people to help us grow the business. That’s probably the No. 1 thing we’re focused on is protecting that culture and communicating and emulating that to the rest of our team.”