Bigger is Better, Right?

Growth is the goal of every startup. Nobody wants to be working out of a storage locker or struggling to make payroll forever. In fact, looking at most successful enterprises it’s clear the objective is to never make less money than the same time last year. Hypothetically, your favorite pizza chain will never be happy until everyone is eating their product for breakfast, lunch, and dinner, and even then they may try to invent a new meal to make more. Companies big and small see plateaued earnings as something to be avoided at all costs, being one step away from loss.

However, growth and earnings are not one in the same. Expanding too far and too fast for the future to handle is how many great companies wind up broke and evaporated after startup success. Growth must be tempered to match the realities of the market. Achieving rapid sales at the beginning doesn’t necessary mean it will remain that way indefinitely. Business leaders at the helms of successful startups must proceed cautiously when expanding.

Caution should not be confused with inaction, however. Regardless of the risks, startups must inevitably grow up. The trick is to minimize the risks of investing in your own enterprise – essentially “cutting corners” but the right way:

Staff

Filtering the good job candidates from the bad is a job all on its own. Traditionally companies with projections of expansion designate an entire department – human resources – to finding the right men and women for the positions that need to be filled. These days most startups can’t afford HR, but they increasingly can’t devote the time it takes to finding good people either. There is simply too much to do to keep the enterprise operating in the meantime. Startup leaders can compromise by offering help with staffing through a respectable placement agency. Think of it like subscribing to an HR department instead of owning one. Virtually all professions are covered, from education to IT to marketing.

Space

Moving is a hassle. It’s true for our personal lives but it’s equally valid for companies as well. Success almost invariably leads to an urge to escape broom closet conditions common with young companies, but there’s no need to fix what isn’t broken. If the office, industrial, restaurant, or warehouse space works without apparent flaws in logistics then stay put. It will save money, without a doubt, but it also doesn’t break your company’s stride. Young enterprises are especially vulnerable to the seemingly inevitable stresses of business relocation: customer confusion, social media and other online data adjustments, unforeseen headaches of new property, and so on.

Stuff

Startups dependent on sophisticated computer arrays, machinery, or otherwise complex and expensive stuff must apply the greatest of due diligence when making their material investments. Choosing the cheapest option at every turn, or not researching the performance record of a critical component of the business, are common mistakes of growing companies which can spell disaster months or years down the road. Take your time when buying furniture too – the little things go a long way and if $200 made the difference between comfortable and uncomfortable chairs for newly hired staff it’s probably worth it to spend the extra money for better working conditions.

Sales

Successful companies love to spend a great deal of their increased revenue on advertising and marketing to drive further sales. It’s a self-feeding system, or so it seems. Truth be told, too much marketing and advertising, or rather too much of the same thing in general, results in a burnout effect on consumers. The marketing becomes the driving entity with the product or service taking a backseat. It’s fun at first but when the clever outreach wears off nobody is left remembering what the thing being sold was in the first place. Have a clear vision for the future before deciding to invest heavily in marketing and advertising. Doing so ensures any conceived campaigns will be aligned with the projected outcomes and not accidentally hammer away a repetitious call for consumers to act.

Who doesn’t want to see their small business grow and succeed? Knowing the difference between the two is important, however, as one doesn’t always guarantee the other. Expanding an accomplished young enterprise takes deliberation grounded in the right information and above all, realistic expectations for the future.