4 Ways Rapid Business Growth Does More Harm than Good
Business growth that does more harm than good may seem counter-intuitive. We’ve always been taught that any type of growth is good for your business. However, this isn’t necessarily true. Rapid business growth sounds tempting – sales are quickly rising, customer demand is increasing, the market is growing, and quick business loans are very much helpful.
However, rapid business growth is just as harmful as the absence of growth. Here are four ways that explain how rapid growth can harm your business.
1. Failing to Satisfy Your Customers
Business owners would normally be thrilled to have more customers buying their products and services. However, you need to ensure that you’ll still be able to meet customer expectations despite the increase in demand. Many customers prefer mom and pop stores because of the personalized attention and service. If you’re suddenly met by increasing demand, you may find it challenging to maintain quality.
Let’s say you own a car cleaning company. Your usual number of clients is around eight to ten cars every day. The personalized service for every client is what makes your company stand out from other car cleaning companies. As your business grows, you may have less interaction with your clientele. Unless you manage their expectations, your customers may feel left out, and they may prefer the competition over you.
As you grow and expand your business, it’s important to implement proper growth management. Evaluate your company and check how many new customers you can entertain without neglecting your existing clients. If finances allow, you can even hire a customer support staff to attend to and meet the needs of your customers.
2. Inefficient Business Operations
It’s important to get more organized as you scale your business. A growing business may need to hire more employees, purchase additional equipment, and more. For small businesses, these growth expenses may cripple your business’ working capital.
For this reason, it’s important to be aware of your company’s budgets, cash flow, inventory, sales, cost estimates, forecasts, etc. Additionally, make sure that your employees are working together as a team in achieving business goals while remaining organized.
3. Errors in Cash Flow
Cash flow problems, if not addressed ASAP, can be detrimental to your business. Unfortunately, errors in cash flow are inevitable. In fact, issues with cash flow are one of the major reasons why many small businesses fail. Whether your accountant made a mistake during accounting or you didn’t understand the difference between profit and cash on hand, these errors can mean big trouble for your business.
Make sure that the cash that goes into your business is larger than the cash that goes out. In other words, your monthly expenses should not surpass your operating capital. It’s important to plan accordingly by ensuring that your finances are in order as your business grows.
4. Losing Track of Your Ultimate Goal
It’s easy for small business owners to get caught up with the idea of growth and expansion. Many entrepreneurs are tempted to expand into uncharted territory. For instance, if you’re in the house cleaning business and someone hires you to clean some commercial buildings, this could mean big contracts and new opportunities for your company.
It’s difficult to resist these business opportunities, but deviating from your primary business model too quickly can put you in an unstable position. Taking on new opportunities without the right resources may force you to turn your back on your original client base.
Success in business requires taking on risks, which is why it’s natural for business owners to want to try new things. However, you need to carefully consider the time you have in devoting yourself to a new plan, your budget, and other resources. Furthermore, you also need to maintain the safety net of your existing business model because if this new opportunity doesn’t pan out, you can fall back on the original concept.
Quick Business Loans to Help with Rapid Business Growth
A growing business is every business owner’s dream. Although growth is exciting, proper growth management is critical. Contrary to what most people assume, growth can actually be detrimental to your company. Be sure to keep an eye on your financing, as well as other aspects of your business such as technology, customer service, and your overall business operations. If you find that you’re falling short on cash, consider exploring different quick business loans to know which one best suits your current needs.