Overcoming business growing pains
Growing a business is a time of excitement, anticipation and risk. As a small business owner, it’s tempting to prioritize sales over everything else in the name of keeping your business afloat while developing its capacity. However, there are problems with rapid growth of a business arising from taking on too much too soon. You can’t learn to run before you learn to crawl. To avert the complications associated with a small business growing too fast, you must strategize for your business’ smart growth, scaling it sustainably so that you can keep up with the pace of expansion.
Business growing pains are inevitable, but you can avert the risks of expanding a business.
Ready to improve your business?Take your business to the next level
Business growing pains are normal
Any discussion of the problems with rapid growth of a business must address the fact that business growing pains are normal. Businesses are just like people in that they have distinct business life cycle phases: Infancy, adolescence, adulthood and the hard-earned golden years. Like people, it is impossible for a business to advance from one developmental stage to the next without effort and some struggle, or “business growing pains.”
Problems with a small business growing too fast often occur when a company does not adequately complete the tasks of each stage, cutting corners to skip to the “growth stage” (adolescence) more quickly. Since a business develops its more rudimentary operational framework in infancy, a rushed approach to growth results in a business having an insufficient framework for functioning effectively. Rather than thinking of your company’s growth struggles as a problem you must quickly circumvent, think of them as a sign that your business is ready to mature into closer alignment with your business vision.
Problems with rapid growth of a business: Signs and symptoms
When it comes to problems with rapid growth of a business, keep an eye out for the following tell-tale symptoms.
Insufficient cash flow.
If you are experiencing a “business boom” accompanied by a cash shortage, this is a symptom of a small business growing too fast. The reasoning goes back to your stage in the business lifecycle. As an infant or emerging adolescent business, you are likely still collecting payments on old jobs you completed when your business was smaller. Now, as you grow your business, you’re faced with newer and larger expenses reflecting a growing workload. The payments from your older, smaller jobs cannot sustain unpaced growth, and your cash flow will reflect this.
Declining employee morale.
Declining staff morale is one of the most destructive problems with rapid growth of a business. Staff responsibilities increase as sales increase. If your team does not have the support it needs to operate effectively, morale will plummet. As an emerging business, it’s also likely that your staff has not yet received a pay increase to compensate for increasing responsibilities. And when it comes to morale, it’s your customers who bear the brunt, since it’s difficult to prioritize customer service when your own on-the-job needs are not being met.
How to help a small business from growing too fast
Being intentional about your policies, practices and company culture will take you lightyears in helping a small business that’s growing too fast.
Scale your business mindfully.
Mindful scaling is the concept behind sustainable business growth. In mindful scaling, there is an initial period of linear growth in which a company develops the internal processes and skills it needs to (later) expand sales. Once a business is able to successfully incubate its operations, it can then shift into a period of growth-oriented development. When you are trying to prevent the problems with rapid growth of a business, it’s essential that you remember the principles of sustainable growth. Hone your company culture and brand identity before accelerating sales. By scaling sustainably, you buy yourself the time you need to perfect your product or service, create thoughtful and effective operations, establish your team and ultimately build a brand that will stand the test of time.
Address insufficient cash flow.
To prevent the complications associated with a small business growing too fast, you must plan for cash flow problems before they become fatal for your business. Saving funds in a growth reserve fund is one way to have cash on hand for emergencies. In addition, you must always overestimate expenses and underestimate revenue to have a conservative and realistic sense of your cash flow needs. That said, if you haven’t preempted these particular risks of expanding a business, there’s still hope. If you’ve been growing your business too quickly, it’s likely your money is tied up in accounts receivable. Consider adjusting your invoicing practices to obtain timely payments, and pursue collections if you need to (ideally through an independent third-party collections agency so as not to drain your staff).
Address declining employee morale.
Recognize that rapid growth has the potential to signal rapid (short-term) profit, and that profit does not directly benefit your staff. Instead, your staff does the work necessary to achieve growth, but does not receive the same benefits your investors, partners and executive team enjoy. You must take action to prevent resentment from festering, since this is a recipe for rapid turnover. Rather than blame your staff for being unable to keep up with a rapidly-increasing workload, prioritize staff morale by keeping the lines of communication open. This is your opportunity to develop company policies that foster staff collaboration and project ownership. You must also keep in mind that employees are necessarily motivated by compensation, and you’ll lose valuable staff if you’re not compensating them adequately.
Take action today to overcome business growing pains by following Tony Robbins’ 7 Forces of Business Mastery. You’ll learn to optimize your business, sharpen your competitive advantage and create loyal customers for life.
Ready to improve your business?
Learn how to manage a rapidly growing business with Tony Robbins’ 7 Forces of Business Mastery free content series.