Dangers of Growing too Fast

Posted by Carl Gould on January 27, 2011
Career, business, entrepreneur, small business owner

It is every business owners dream to launch a hyper –growth business. But how fast is too fast?

If you are not properly prepared, you can grow yourself right out of business. Here are some of the signs…

  1. Quality Suffers: You don’t have enough time to double check or triple check your work. Minor defects that you would normally detect in the course of routine QA and QC processes are now slipping through the cracks.
  2. Customers Complaining: When your customers are telling you that you are not responsive in a timely fashion that may be a sign that you are growing beyond your capacity to service your existing customers.
  3. Low Operating Cash: When you are growing fast, your need to spend on materials and COGS will outpace your collections. Remember that business is a cash game. When you are out of cash you are out of the game.
  4. Time is Spread Thin: The faster you grow, the more demands there is on everyone’s time. If you lack the bandwidth to do a thorough job, the above-mentioned symptoms will get worse.

Fast growing companies can be exciting. They can also be dangerous. Many a company has spiraled out of control (and crashed) because they did not manage their growth. Would you like a FREE Business Analysis to make sure that your company manages its growth properly? Call our offices toll free at 877 GO 7 STAGES.

 “Carl L Gould is the President and Chief DISCoverY Officer CMT International, LLC (www.CMTmentors.com), the farthest-reaching business mentoring organization in the world. Carl’s unique approach to executive coaching, business mentoring and performance training helps his clients achieve results worldwide.  His latest book, The 7 Stages of Small Business Success – From Startup to 7 Figures in Three Years or Less, will provide entrepreneurs and business owners a step-by-step formula to taking their businesses to the next level”. Gould is also the author and creator of The 7 Stage Turnaround Process (www.7StageTurnaround.com).  7 Stage Consultants help business owners grow their sales, increase their cash flow and lower their expenses using a proven method of business growth strategies.  To learn more about our Consultants, go to http://7stageturnaround.com/mtc/mentorlist.php?groupid=1

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2 Comments to Dangers of Growing too Fast

Jodie
July 21, 2011

I can’t say I’m in much danger of finding out what it’s like to actually be in control of a business but I’d imagine that growing too fast is just as dangerous as no growth at all. Maybe more so, as you can kick your business up the backside if nothing is happening but if things are sweeping you along, you can drown.

Where I work originated as a small start-up and I’ve seen it double in size. And needless to say, there have been a fair few changes made; policies and procedures that weren’t necessary before, SAP Business One was installed instead of doing the accounts on spreadsheets and, of course, the all important water cooler. Growth is fine but only if it’s in proportion.

Carl Gould
July 21, 2011

You are so right Jodie, growing too fast is just as dangerous as no growth at all. Great to hear that your company has doubled in size. Let me know if there is any way I can help you continue on that growth curve!

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