Growing Pains - When Your Business Growth Needs To Slow Down
Can Your Business Get Too Big, Too Fast? Watch Out For These Growing Pains.
Is there any better feeling than watching your business grow? Seeing your client list grow and the cash flow increase can feel like a shot of pure adrenaline. That excitement can sometimes override an important concept, especially for first-time business owners: growing too big, too fast.
When Does New Business Become Bad For Business?
As much as you may love to say yes to every new opportunity that presents itself to your business, it may be time to put your foot on the brake and slow things down. If you continue to charge full-speed ahead you may realize further down the road that you have hired or spent money in ways that don’t offer long-term benefit.
Especially if your business offers different things for different types of customers, it can become increasingly difficult to do all of them well – which can reduce the overall value of your business. Here are the top five most common pitfalls we want your business to avoid:
1. Losing Track of Finances
When your business is just smaller, it can be easier to keep a close eye on the numbers and watch how expenses are stacking up against sales. Growing quickly means its easy to lose track of your budget.
2. Cash Flow Mistakes
Cash flow mistakes are extremely common, and one of the most common reasons why many small businesses fail. Growing too quickly opens to the door to having more monthly expenses piling up than your operating capital, and leave you just a bad month or two away from going under.
3. Putting Too Much Value On Sales
If you can take care of sales, the rest will follow, right? Wrong. Sales numbers are important, but they don’t have the final word when it comes to making financial decisions. Look at market studies, economic analysis and other data to make sure your path forward is built on solid ground.
4. Ineffective Business Operations
Getting bigger means you also need to be more organized. A fluid workflow might not be harmful with your small startup team, but it doesn’t scale well. As your staff grows and teams fill out, having an established structure for your business to grow into can be the difference between success and failure.
5. Hiring The Wrong People
Growing quickly means you need to staff up, and fast. But hiring too quickly can mean making compromises that harm your business further down the road. An applicant might have the skills you need in the moment, but are they actually a good fit for your business? Make sure you have the time to decide before sending over that contract.
How Do You Know When It’s Time To Slow Down?
Like I said earlier, it’s easy to get swept up in the glow of having a successful business and overlook the signs that you may be expanding too quickly. Want to make sure you don’t get ahead of yourself? Here are some warning signs, as identified by the Forbes Coaches Council.
1. Growth Is Breaking The Foundation Of Your Business
Is the culture of your company being sacrificed, or transforming with the growth? Are your “base business” customer still happy?
2. You’re Getting A Lot Of Complaints
This may be the number one sign that you’re scaling too quickly, so make sure it’s the process for a customer to complain is easy and obvious, and that you have a good system in place for monitoring and response. Listening to those complaints will guide you to where you need to focus on improving.
3. You’ve Stopped Performing Well In The Areas You Used To
Maintaining products, clients and services that served as the foundation for growth are often sacrificed to make room for focusing on the future.
4. You And Your Staff Can’t Keep Up
Feeling like you’re being spread too thin? You’re probably right. Being over-tasked can result in poor customer service, tasks falling through the cracks, slow product or service delivery, and not having time to train or implement systems.
5. You’re Spending More Time On Operations Than Customers
This one requires a hard look at the breakdown of your day to day work. If you’re spending more time on the internal workings of your company that you are on your customers, it’s time to shift your focus.
For 10 more warning signs to look out for, I recommend checking out the full article on the Forbes website here.
Don’t Just Grow Your Business – Make Sure It’s Thriving With Archimedes C&C
There are a lot of moving parts involved in making sure your business grows at a healthy pace. If you’re looking for someone who can take a look at your operations plan, or help you establish the procedures necessary to keep everyone on track during a period of rapid growth, drop us a line! Archimedes can also help you with staffing (whether you’re sizing up or down), bookkeeping and payroll, and many of the other things that keep you running smoothly.