Growing too fast
You’ve set up your business, you’ve passed the milestone first year in business and you’re gaining momentum. Suddenly there is a surge in demand and you’re now growing and growing and growing! But are you growing too fast?
This scenario is every business owner’s dream, to have an overnight success, but sometimes growth can be too fast and the speed can take your breath away and the business from under you!
Without solid foundations your business can fall apart very quickly. You need to find a way to purposely slow down the growth, to buy you some time to get your ‘ducks in a row’ and consider how you will handle the rapid growth going forward.
Your business probably started with you, as a solopreneur, but now you need ‘people’ and you need them fast to help you to cope. But growing a business and its resources too fast can have a detrimental effect on just about every aspect of your business!
Are you sure that the growth you are experiencing is sustainable or is it a ‘surge’ and nothing more. Don’t rush to take on staff or buy in things you don’t need (yet).
Assess if this is a brilliant response to any new marketing you’ve done or is it a consistent demand for your product or service that will continue and remain sustainable. Start analysing where the business is coming from. Don’t start spending money straight away, buying in extra staff, investing in manufacture or stockpiling your products, taking up storage facilities (warehousing) if you don’t need it. If you are selling a service as a consultant, are you filling your diary with appointments so that you have no spare capacity, or are you just busier than normal. Are you turning lots of new clients away?
If growth happens too quickly, here are some of the fundamental things that can go wrong within your business:
At the beginning, when you started your business, you prided yourself on your excellent customer service. In fact you probably (personally) dealt with every ‘sale’ yourself as it was very likely that is was only you, delivering it to the customer. When a business grows too fast customer service can really suffer and then the complaints can start rolling in. You simply cannot give the 100% effort you once could, as you are now spinning all the plates and hoping they don’t fall! When you’re struggling to keep it all together, on your own (or with limited support), something has the ‘give’. Spending as much time with each customer is simply not an option now, giving a bespoke service, one that you prided yourself on, it is simply not possible. So many of the small personal touches that you did before which made your clients love you (and you were proud of) can become compromised.
The 5 star reviews you once gained can now slip to a 3 or 4 star review! Negative reviews online cannot be erased. Just because your business grows, does not mean that your customer service levels do too!
Losing a grip on your finances
Building a business, you need to know your numbers and know them every day! You need to be on top of your finances. You need to know your P&L, who owes your business money, have a cash flow forecast, understand your best-selling products or services. You should be able to see clearly (and daily) where things are changing and how. When a business grows too quickly and you find yourself fire-fighting daily means that you can easily lose a grip of your numbers and really quickly find that you are operating in a bubble of delusion or ignorance.
Hiring & Firing
When your business takes off or suddenly sky rockets, it’s easy to think you need to hire lots of people to help you, but getting the wrong people involved can do a lot of damage to your business. A knee jerk reaction can result in recruiting the wrong roles and hiring then firing! An unpleasant experience all round, for everybody involved and a costly one too. When writing your business plan you should have identified the key roles you needed to put in place when growth happened, but maybe you’ve forgotten to ‘dust off’ your business plan and see what you had predicted.
Hire in haste and you may live to regret it. Consider outsourced help first, initially to see if this role is needed (yes it will be a more expensive way to do it in the early stages but not as expensive as taking on the wrong employees or too many of them and then finding that the business does not have enough money to pay their salaries each month).
When you need to employ staff, are you ready? Growth spurts can often lead to a lack of technology or IT structure, when you need it. Investing in a brilliant CRM system, a robust daily backup system, a remote file sharing system, better laptops and devices, a well thought out remote working model, good antivirus software or product licences, a better company website and so much more. There are so many things you will need to think about if you grow quickly to help build your infrastructure which can be costly but necessary. Get an IT company or an IT Consultant to help advise you on any vulnerabilities. They will need to get involved to look after your ‘network’ set up and help structure home working plans for your people. If you have an office you may need onsite servers. A lot of these things will take time to consider and research (even more so if you are not technically minded) and one thing you will not have when you are working 24/7, trying to stay afloat, is time!
When your business is unexpectedly growing fast you are under constant pressure from all sides, but stress means that you are unable to think clearly and will make costly mistakes.
Fast growth does not mean profitability……
For more information read: How to slow down the growth of your business