Growing Your Business Too Quickly Can Spell Trouble

Growing Your Business Too Quickly Can Spell Trouble

It’s a fact that business owners are interested in growth. Sure, there may be some that are fully satisfied with the level they have attained but for the most part, if you ask business owners about the things they want most for their business, growth will show up in the top three.

The idea of rapid growth is quite seductive what with the stories about Amazon and Facebook, but rocket-fast growth also occurs in companies little known to all but investors and the business people that avidly track the fastest growing companies in the world. Companies like Quidel http://www.quidel.com/, ZTO Express https://www.crunchbase.com/organization/zto-express and BooHoo.com http://www.boohoo.com/ are also soaring high, and I imagine there are many readers puzzling right now about what these companies actually do. But the point is that business growth is the Holy Grail for business owners in all business sectors.

Of course, this holds true not only in large, publically traded companies, but also in small to mid-sized organizations that wish to recognize the benefits most associated with rapid growth. More market share, recognition, and increased profits are tempting goals, however, there are risks associated with growing too quickly. The truth is that growth that comes too quickly can undermine the long-term sustainability of your company and have a deleterious effect on your customers, employees, and production.

Here’s why:

The Impact of Rapid Growth on Your Employees

Rapid growth usually means one of two things – you will need to recruit and hire new employees, or you will try to execute the increased work using your existing staff.  Bringing in new employees too quickly will change the dynamics of your company and impact the corporate culture that has developed over time. Existing employees may feel defensive and morale may become compromised as they see new employees asserting themselves in what was heretofore their “turf.” Additionally, making quick hiring decisions often leads to bringing on new employees that may not be the right “fit” for your company in the long-term. Should you try to handle the growth with your existing staff they may quickly burn out as a result of their greatly expanded workload.

The Impact of Rapid Growth on Your Customers

Rapid growth does not always equate to a positive situation especially when the company has not had the time to develop the systems and procedures necessary to satisfy a much greater number of customers. We’ve seen this happen personally time after time. The once small company that now sees you as a “number” rather than a valued customer or the restaurant that you loved to frequent but grew so fast that the quality of their food and service greatly diminished. It’s not to say that customers aren’t important when you grow large, it’s simply that they are often more important when you are smaller and have fewer customers to care for and nurture. Wooing and winning customers is important regardless of the size of your company; wowing and retaining them is extra important when you are smaller.

The Impact of Lack of Training on Your Employees and Customers

Employees that aren’t given the time to receive the skills training necessary for them to do their work will most likely not succeed at their job. Their substandard performance can upset your customers and ultimately impact your business. These employees may also suffer from low self-esteem as they try to do their work successfully but often fail because of their lack of training. Retention will be difficult and your recruitment and hiring costs may soar. Slow and steady business growth provides business owners with the time to adequately train their employees, hence ensuring that their work will be done successfully and customer needs will be met.

The Impact of Rapid Growth on Your Operations and Production

Your growing company will now have many more customers and you must scale accordingly. When growth happens too quickly, there’s a tendency to put “makeshift” solutions in place that are truly not sustainable and barely serve to satisfy the situation as it exists.  Inefficiencies become much more glaring and the business owner’s ability to handle the flow of business might only come with tactics that can impact profitability such as adding equipment, hiring new people or moving to a larger facility. Slower growth provides you with the time and bandwidth to move strategically and make better, long-term decisions that can support your need for increased production.

The best strategy is to plan for sustainable growth at a gradual pace and to establish systems and procedures that will not only support this increase but also better ensure profitability. Growing too fast may carry more risks than rewards.

June 5, 2018