The market is great. Orders are coming in. Customers are happy. As we head toward Q2 of 2020, it may be an opportune time for you to focus on business growth.
But not so fast. Literally.
According to a recent study, two-thirds of the companies on the Inc 5,000 fastest-growing companies list have gotten smaller, been sold or closed their doors indefinitely, just five to eight years after earning the publication’s distinction.Business growth is good — if you’re managing it properly. As you’re planning for an expansion, be sure you’re making decisions that’ll support your business for the long haul.
From overestimating sales to hasty hiring missteps, the wrong moves can create disasters that you never saw coming.
- Letting quality suffer. As your business becomes fixated on quantity — whether it’s servicing more customers or increasing product production — it’s easy to let quality slip. Keep in mind that first and foremost, you’re in business to provide superior products and services. If buyers lose faith in your brand, you may have a hard time repairing the damage.
- Sluggish cash flow. Businesses need (a lot of) money to operate. As you’re growing, you may find that spending starts to outweigh revenue. Just because money is coming in the door doesn’t mean you can sidestep cash flow growing pains. It’s important to remain strategic and conservative, so you don’t end up in the hole.
- Hasty hiring decisions. You’re expanding fast, and that means you may also need to expand your team. When time is of the essence and you’re rushing to fill a need, you may not allocate the necessary time or resources to find the best fit for critical positions. Remember that you want top-notch employees working on your behalf, and that process deserves careful time and consideration, as well as a comprehensive onboarding strategy.
- Dropping the ball on service. Customer service demands will continue to increase with your business. If you don’t have the staff to handle the volume of product-related calls, orders or inquiries, your customers will feel the loss of customer care and personal attention, which may be perceived as poor management.
- Putting all your eggs in one basket. Growing companies can set themselves up for failure by depending on one particular customer, vendor or employee for the majority of their success. The truth is, even the most loyal customers and vendors can jump ship and go elsewhere, and your employee of the month may be one job offer away from working for the competition.
- Not scaling your technology. Every growing business needs technology that can grow along with it, ensuring your systems and processes are running efficiently. From data storage solutions to cloud-based applications, what does your business need now, and what technology might it require down the line? Don’t invest in solutions that aren’t going to serve your size, goals and budget for the future.
The tortoise or the hare?
Sometimes, in the race to grow, it’s better to step back and take your time to the finish line, so you can avoid costly mistakes that can hurt your business. If you need objective guidance mapping out a plan for long-term success, let us know how we can help.