Business Strategies
Fast Growth Challenges
If you are in fast-growth mode, here are five things to watch out for and how you can address them: outgrowing your infrastructure, attracting new competitors, losing talented people, stretching your human capital resources too thin, and diminished customer service.
There is a rule in business that if you aren't growing, you are dying. But grow too quickly and you may still find yourself on the fast track to the small business graveyard.
If your business is in fast-growth mode, you need to stay alert for trouble signs before it's too late. Here are five of the most common fast-growth snafus worth watching.
1. Growing Beyond Your Infrastructure
Infrastructure is the backbone of your business. It consists of the capital resources, systems, and processes that you use everyday to run your business effectively. If growth outpaces infrastructure, resources run thin and systems get stretched to their limits. In other words, your business becomes less effective. Planned growth buys the time you need to upgrade your infrastructure to maintain the same level of quality that made your business a success in the first place.
2. Attracting Competition
It is difficult for a fast-growing company to fly under the radar of the competition. People are going to notice your success and other businesses will quickly push their way into your market to claim a piece of it for themselves. By limiting your growth to the number of customers you can handle effectively, you can develop deeper relationships with your customer base and reduce the likelihood that they will jump ship when competitors appear.
3. Losing Quality Staff
An overheated growth cycle is stressful on a business. However, quick growth is especially difficult on key employees who are typically leaned on in a pinch. Lean on them too much and you will likely lose them to competitors whose work environment reflects a more normal pace of life. Instead of losing them, engage key employees in a dialogue about how your growth is affecting the company and share your plans to remedy the situation as soon as possible.
4. Stretching Human Resources
Key employees aren't the only ones who are affected by rapid growth. All of your employees will be forced to deal with the reality of trying to squeeze more work into their work week. When business is booming, it's tempting to put off hiring additional staff as a way to beef up the bottom line. But the extra profits you reap will pale in comparison to the extra headaches that come with a disgruntled workforce. A more reasonable approach is to map out a schedule of new hires that is gauged to benchmarks of growth. Solicit input from department heads to determine how many additional workers you'll need and when you will need them.
5. Eroding Customer Service
One of the most important considerations during periods of fast growth is the effect it is having on your customers. Customer satisfaction is the ultimate measure of your ability to sustain growth over the long term since a satisfied customer will probably become a repeat customer down the road. If your growth is threatening your ability to provide quality customer service then you need to take a step back and examine whether the gains you are realizing in the short term are worth the losses you may incur later. When customer service lags, the smart move is to slow things down and give yourself time to recover before moving forward.
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