When you’re running a business, opportunities to grow should be constantly on your mind. Not because growth is always right, or all those opportunities are right for you, but because if you’re not staying abreast of those opportunities and making an informed judgement about each one, you could miss the perfect one for your needs and have to settle for something less than perfect.
This focus on growth doesn’t necessarily mean working towards becoming a world dominating goliath like Amazon. Even for small businesses happy to remain focussed on their local community, a certain amount of growth is necessary just to remain stable. Customers are lost to changing fortunes and fashion, to new competitors and economic circumstances. The right kind of growth keeps you stable – any business growth consulting firm would agree!
Today we’re taking a look at some of the risks of growth so you can counterbalance them against the much desired rewards.
Growing Too Fast
It’s a paradox of business that too much success can be fatal. However much funding you have, however good your concept is, however good your actual product is, your reputation – the thing that dictates if people will actually buy it – depends entirely on your ability to deliver it. And if you grow so quickly your customer- or client- base outstrips your ability to deliver well you either disappoint customers by making them wait, or hire equally quickly and risk delivering a poor version of your service or product.
Either way it’s important to maintain an up to date understanding of your business capacity and the extent to which you can grow it reliably and tether your speed of growth to that capacity.
All growth comes with a financial commitment – nothing about it is free. The hope is, with market research to indicate what your customers want and where they are, that investment will be repaid rapidly with new sources of revenue, but until your growth effort is established and paying for itself, whether it’s a new office, a new product or simply a shake up in your marketing, you need to support it. It takes money and time away from your already stable business.
If your research doesn’t pan out or your consultants have over-promised then you could be supporting that new endeavour for much longer than anticipated. The normal failure state is that it never stabilises and you have to abandon it, which can be brand-damagingly embarrassing. The worst case scenario is that the failure destabilises your business and you find yourself in urgent need of funds and at risk of closure.