Startup Tips: The Potential Pitfalls of Rapid Business Growth
Whether you’re a large startup, or an established organization entering a period of growth, it can be a great thing to expand and achieve your objectives and then some, but it’s essential to have the right framework in place to make that growth sustainable.
A lot of businesses work so hard for growth that they don’t think about the consequences of it happening too fast. Even well-established corporations might not have the tools and foundation in place that will allow them to grow in a healthy, long-term way.
The foundation for successful and sustainable growth should include the technical elements, such as the right expense report software and auditing tools to ensure consistency and regulatory compliance, as well as strong cash flow, and the ability to deliver quality consistently.
So what if your business is growing extremely quickly, but these elements aren’t in place?
The following are some of the things that can happen when you’re growing too rapidly for what you’re able to sustain.
Cash Flow Issues
Cash flow is one of the biggest problems that can arise during a period of rapid growth. It was touched on above, and before even large corporations often even realize what’s happening, their operating expenses have gone beyond their credit availability.
When this happens if there is a decline in sales for a period, it can be completely devastating.
Problems Implementing Operational Strategies
This tends to be a problem with newer businesses or companies focused on innovation and technology. They want to embrace the culture of innovation that surrounds their products or services, so they’re focused on doing things in the newest and best way.
Unfortunately, that can lead to problems in implementation that eventually can be insurmountable.
If you’re sidelined even briefly because of implementation, you may not have time to catch up in today’s fast-paced environment.
Customer Service Missteps
Every company, large small, new or old has to keep up with the changing demands that are part of the new way of managing customer service. No longer are problems kept internal, but instead, they’re splashed out for the world to see online and on social media platforms.
If a business isn’t prepared to deal with the challenges that come with modernized customer service requirements, it can tank them extremely quickly.
This isn’t just a problem for new organizations. It’s also something proving to be a hurdle for older and more established companies that are having trouble keeping up with customer service in its current form.
A Lack of Adequate Leadership
Finally, the problem with rapid growth may not lie in external factors. It may lie within the leadership of a business.
It’s important that business owners never become set on one way of doing things, and they should always be willing to make changes when necessary. With that being said, a strong leader also needs to understand that not everything needs to be a sweeping change, even when growth is happening quickly. Instead, manageable, incremental changes can be the best path.