Growth May 29, 2013 Last updated September 18th, 2018 1,162 Reads share

Am I Growing My Business Too Quickly?

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When it comes to the growth of your business, beware of too much of a good thing. Although a vision of runaway growth may seem to be the stuff of dreams, it can quickly become a nightmare if it happens to your business. Like all business owners – large and small – your goal for your company is undoubtedly growth, but make sure it’s controlled growth, gauged to your ability to handle the demands that come with it.

Although it might seem counterintuitive, growing your company at too rapid a rate is one of the easiest ways to run it out of business. Uncontrolled growth makes it increasingly difficult to keep your customers happy, and a business with unhappy customers is clearly in danger of failure.

Warning signs

So what are some of the signs that your business is growing too rapidly?

If you and all of your staff members are being run ragged handling day-to-day business, there’s a good chance your business’s growth rate is out of control. Either that, or you launched your business operation without ensuring a realistic level of staffing for your short-term needs.

Inadequate infrastructure

A related indication of too-rapid growth is a business infrastructure that’s no longer large enough to handle the demands of your operations. When you find that your computer systems – both hardware and software – can no longer keep pace, you may have allowed your business to outstrip its resources. If yours is a manufacturing operation, and the downtime on your production facilities is increasing because of increased maintenance needs, you’re probably expecting too much from too little.

If your business deals with outside vendors and suppliers and they can no longer keep up with your demands for products or parts, you probably are exceeding your growth limit and should take steps to slow it down.

Don’t sacrifice quality

A successful business achieves success by delivering quality products or services to its customers. If you notice that your business’s delicate balance between quality and quantity has shifted to the latter, you probably are growing too fast and run a very real risk of losing the competitive edge that brought you success.

Putting together backup financing

Having to borrow to keep your business afloat is a sure sign that you’re growing too fast. Assuming you adequately capitalized your business for the short-term future, your cash flow should be sufficient to meet your needs. The fact that it isn’t is a warning sign that something’s got to give.

While it’s always best to be prepared for the unexpected, the very fact that your business is growing too rapidly is a sure sign that you missed the boat there. Because money – or a lack thereof – is at the root of most business failures, you’ll need to scramble to put together a line of credit commensurate with your accelerated rate of growth.

This increased capitalization, always harder to set up if you’re arranging it after the train has already left the station, will allow you to add the extra employees, computing power and other business infrastructure you need to cope with the stepped-up demands of your growing business.

Consider telecommuters

Although you’ll need to address all the weaknesses in your overall business operations, most of these can be fixed if you have the money to do it. When it comes to hiring extra help to cope with your business’s rapid growth, you may want to look at telecommuters to fill in some of the gaps in your operation. It’s likely that your business quarters are already filled to capacity with your existing team.

Another way to reduce the burdens of rapid business growth is to review your customer list and ease out of the relationship you have with customers that are more trouble than they’re worth. Every company has some of these. They claim an inordinate amount of your customer service time and resources and yet insist on paying the lowest possible price for your products or services.

Plan for growth

For those business owners who have not yet experienced the downside of growing too rapidly, perhaps this will be a wake-up call about the importance of carefully planning and controlling business growth.

Try to ensure that the financial resources available to you are more than adequate to meet the business’s foreseeable needs. Keep a close watch on your cash flow to avoid getting caught short. At the first sign of a sharp uptick in business, take steps to tamp down the growth and arrange for increased capitalization to keep up with demand.

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Don Amerman

Don Amerman

A longtime editorial professional, Don Amerman has spent the last several years as a freelance writer, covering a broad array of topics, including business, finance, digital media, consumer health, and travel.

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