Rapid Growth Isn’t Always A Good Thing…

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When you first started your business, I’m sure that growth was one of the things you thought about more than anything. Obviously, it’s healthy to want your business to be as successful as possible. However, there’s more to business growth than opening new branches and making more money! You may not be aware of it, but there is such a thing as growing too quickly. In fact, this can be one of the most detrimental dangers which any new entrepreneur runs into. Here, we’ll look at some of the biggest dangers which come from growing too fast for you to handle.

Firstly, getting into too much debt from loans. If you don’t do enough financial planning for your projected growth, you can easily spiral into a massive amount of debt. Expansion, particularly if you want it to be particularly fast, takes money. When you first start setting things in motion, you probably won’t have that much in the way of dispensable capital. This means that you’ll have to take out at least one substantial loan to keep your business growing in all the areas you want it to. Often, debt is a perfectly justifiable means to an end. However, sometimes it can be the start of a vicious circle. More growth means increased orders, and more money is required to fill those orders. This leads to even more debt, and the whole cycle starts again. If you get into this vicious cycle, your debt may be in danger of bringing your business to the ground. Take out loans by all means, just make sure you’re being realistic with your cash flow projections. Fail to cover your debts, and your growth will grind to a halt faster than you can imagine!

Another big problem associated with growth is taking on too many employees for you to manage properly. Every business needs employees, and as you go through periods of rapid growth you’ll need to take on more and more to keep on top of demands. If you’ve got ten employees one week, and 100 the next, you’ll find it very difficult to make sure they’re properly managed. You need to make sure that employees are getting clear instructions, quotas are being met, and that any big problems are being addressed. Other things like ongoing training need to be addressed to make sure you’re staying in-step with your competitors. A well-managed and efficient workforce can be the thing that makes a business a success. On the other hand, a poor one can topple a business in a very short space of time. When you’re planning recruitment drives, ensure you figure out how you’re going to manage the talent once you’ve brought it on board. It may be worth hiring in some experienced HR specialists, or looking into tech solutions like absence management software. Create new roles, but don’t overwhelm yourself with fresh blood.

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Failing to meet the needs of customers is something you probably never thought you’d do. However, this is another big danger of growing too fast for you to handle. Demand is good, but undersupply should be avoided like the plague. Being attentive to your customer’s needs is a massive selling point, especially with the modern standards of social media interaction. You may be able to meet everyone’s needs with ease right now. However, things won’t be so easy when your customer base quadruples! If your quantity goes up, your quality has to stay level with it. Let’s say you were running a small cleaning company in your local area. When you have a small number of clients, you’ll be able to get to know each one personally, and tailor the service they receive to their precise tastes. This will make your customers feel special and appreciated. Let’s say this exact trait is gives you a massive amount of word-of-mouth marketing. If you don’t adjust to this with more staff, equipment, and possibly operating hours, then your new customers will start to realise they’re not getting what they came for. This will lead to a poor reputation, customers leaving in droves, and your cash flow grinding to a halt. Bringing your customers a product or service that they love may seem easy right now. However, if you’re shooting for rapid growth, make sure you can maintain standards even when demand goes through the roof.

If you thought growth was always a good thing, I hope this post has opened your eyes. Obviously, you should be pursuing your long-term goals. However, make sure you’re never biting off more than you can chew!