I know, business growth sounds like a good thing. And it is. However, growing a small business requires planning, and I’ve seen businesses grow too fast. This uncontrolled growth can lead to quickly going out of business. You could burn through cash, exhaust your resources, not to meet customer demand, make risky hiring decisions, and above all damage your brand.
When I give small business advice, I focus on the idea of controlled growth in other words, I want entrepreneurs to plan for future growth, while you certainly want to take advantage of opportunities, it’s best to grow your businesses on a schedule. If you see these red flags, your business might be growing a little too fast.
1. You’re Fielding Customer Complaints Left and Right
When growing a business, you have to put the customer first. If your customers call with constant complaints, you might have overextended your staff resources.
In my experience, rapid growth usually means that important things fall through the cracks. You can’t respond to customers in a timely fashion because you don’t have the manpower and resources.
2. You Don’t Know Where You’re Going
It’s great to take lots of orders, but if you don’t have the cash or a line of credit to keep up with inventory, raw materials, or to hire more staff you will have a significant challenge. It’s best to borrow money before you need it, because loans don’t typically turn really fast. Alternation lending can, but you still need to be in a position to fill out all the required forms, and turn over your financial records quickly to secure financing. And if your financial projections are non-existent or incomprehensible, that’s going to slow down your ability to get a financing from anyone. You want your up-to-date sales forecasts and budget to be correct and realistic; when they’re not, you’ll run into problems. And that’s a sign you’re likely growing too fast.
Growing a small business takes time. You’ll need to give yourself a chance to learn the ropes, adjust to changing consumer needs, and figure out which vendors you’ll use. Attempting to grow your business too fast may lead to unintended consequences.
3. You’re Making Financial Decisions Quickly
When your business starts to take off, you’ll need to better systems, more employees and better training, inventory management software, high volume shipping options and logistics support, and the ability to conduct a high number of transactions. And you have to get them all now.
The problem with this situation is that you don’t have the time to do much research to learn about options to make rational decisions. You don’t comparison-shop for equipment, for example, or vet new hires thoroughly enough. You need well-defined processes and systems in place for your business not to get pulled under be suddenly getting a huge or your product becoming the host Christmas toy. Long-term financial and operational decisions don’t need to be made in a rush, and it’s important to know how to cut costs without stifling growth.
4. You Don’t Know What Type of Growth You Want
Believe it or not, there are many ways to grow a business. For instance, if you sell consumable products, such as bath products or laundry detergent, you might want to focus on increasing repeat customers.
On the other hand, if your products are one-time buys, you might need to launch a new product line and develop a broader marketing campaign.
If you don’t know how you want to grow your business, you can’t scale it responsibly. Don’t wait until to get overwhelmed, slow down and start thinking through your growth strategy.
5. You’re Stressed Out and Tired
All entrepreneurs have late nights or early mornings. Stress is part of running a small business, but it shouldn’t be your constant companion. If stress is keeping you up at night, then you need to make different choices about how your business runs.
If you’re stressed out every day at work, your business is probably growing too fast. Or worse, your business isn’t growing at all. If you are not emotionally in balance, with a plan to get things under control, you could start projecting those feelings onto your staff and customers, which could derail future growth.
I know that you’re interested in growing your small business, but don’t rush the process. Let it happen organically, according to your business plan.
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Originally published at www.nextiva.com.