The Big Dangers Facing Your Fast-Growing Small Business
Whether you are working alone from home or running a small company, chances are you are thinking of growing your business. It’s how companies survive, after all and strong business growth will help secure your future on a personal level, too.
The trouble is, many small business owners get caught out when they try and grow too quickly. The result? A company that fails before they even know what’s happened. The dangers of rapid growth can be avoided, however. In this guide, I’m going to take you through some of the things you need to consider so that you can identify when you are growing at too fast pace. Let’s get started right away.
Finances
The truth is that to finance your growth, you’re probably (not always, but probably) going to have to borrow money. You will need a lot of extra capital which just isn’t available in the early stages of growth – it’s just the way it is. The problem develops when you use borrowed money to finance the growth explosion, which creates a cycle.
You need to produce more, so you borrow more. However, at some point, the bank is going to say no, and your business can implode. The key to avoiding this happening is proper fiscal management. It will help you control your growth based on your profits, rather than your ability to borrow.
Employee issues
It’s vital that you give your new staff get the education and training they need. Employees will often need a lot of support, too when things started moving the right way. Growth means change – and they might not like the direction you are taking.
There’s also the issue of buying or merging with another company. Sure, you might be bringing in a host of new workers that can benefit your business, but there is a lot of potential for danger. First, you have legal responsibilities to take care of. You will need to find an employers TUPE guide for more details on the situations that can arise, of which there are many. You might have to pay some staff more than others, for example, and have a two-tier wage system in place.
Also, there might be staff members who feel alienated about the whole process. Without the right people on board who buy into your business growth, it’s going to hinder your chances of success. Make sure you cover your back with regards to the law, and always offer staff the right level of support and understanding.
Customer service
There’s a reason why your small business has been so successful. In simple terms, your clients love what you do, and how they operate. The trouble is, can you guarantee that those service levels will remain the same when you grow your business? Trust me, the second you start hiring other people, you run the risk of offering a different service. You might not have time for that personal touch that made you so successful–and once you lose that USP, it can be hard to get it back.
The solution is simple – and it’s all down to better planning. Make sure you never take on so many clients that your services start to slip. And if you hire anyone, train them to behave and act exactly the way your customers have come to expect.
