6 Tips on What Are The Risks To Business Growth That Is Too Fast?

2) Company Expansion Leads to Inefficient Operations

Running a business is always challenging, and when operations do not proceed smoothly, it can cost the company money, time, and other valuable resources. When the company’s products or services suddenly catch on, immense excitement is replaced by the stress of dealing with this increased demand. Even new business owners with excellent business plans can struggle at this time. There is pressure to order more goods and hire more people, and sometimes the hiring process becomes rushed. Problems arise when employees run through training or insufficient inventory to fulfill all orders. New businesses succeed or fail based on their customer service, and if it is not up to par, the problems quickly worsen.

In addition to being aware of the problem and anticipating it, there are other things new business owners can do to fix this issue. For example, individuals can work to manage the ordering system more efficiently to satisfy their customers. New business owners can also network with other companies experiencing rapid growth to learn from their experiences. Finally, business owners can also check in with advisors at local and national small business development centers.

A company’s customers are the most critical aspect of the business. Still, sometimes entrepreneurs must realize that turning down or delaying orders is a better alternative than alienating customers for good. Poor customer service or faulty orders can turn new customers away, and they will usually not return.

3) Customer Service Errors Trigger Negative Feedback

New business owners quickly learn that a small number of customer complaints are a normal part of running a business. However, when complaints and negative comments accumulate, there is a problem that must be rapidly confronted. Whether it is an overall lack of staff or the issue is that employees are not offering excellent service, the entire business can be put in jeopardy when customer service worsens.

If a business receives much negative feedback, it is up to the owner to devise a plan to turn things around. While customers who offer positive feedback will usually return, consumers who review the business negatively will not. First, figure out the cause of the poor reviews. Many times, rapid growth causes these bad reviews. In addition, poor reviews will arrive if the company cannot keep up with orders or has not hired enough staff. The business owner should monitor feedback, stay appraised of social media, and have a simple yet effective plan to deal with negative comments. If an apology or even offering a coupon or credit to the offended party is necessary, these actions should be taken.

4) Overburdened Employees Become Fed Up

New business owners might enjoy working all night to support the company built on their ideas, but employees are different. When employees work too many hours, the company’s entire culture can worsen quickly. Experienced business owners know that employees are the heart of every company, and losing trusted staff can promptly sink a business. Even competitive benefits and pay cannot prevent frustrated employees from jumping ship if they feel their work hours and expectations are unfair.

To prevent this from happening, entrepreneurs should pay special attention to the culture of the workplace. Business owners should encourage feedback during meetings. Instead of spending time in a private office, the new business owner should try to work alongside employees and relate to them. Plus, when anyone on the staff is dealing with a personal problem or needs time off, employers should take the time to speak with them and work to understand their issues—compassion and understanding from the top lead to happiness and satisfaction throughout the business.

5) The Office and Workplace Becomes Too Small

When a business is established, it might only need a few desks and a couple of computers. But as demand grows, employees are added. More orders are made, and a surplus piles up. More space is needed urgently, and the old office or workplace does not fit the bill anymore. New business owners need to recognize that when there are too many employees or too much inventory for one place.

However, making a hasty move, such as moving to a new location before the lease, can lead to unattainable expenses. Paying multiple bills for office space is a problem for any company, especially for a unique and rapidly growing business.

When new business owners plan for this expansion, things are more manageable. Many new company owners find that renting monthly or annual makes the most sense and provides more flexibility. Also, limiting the terms of a lease provides the business room to grow without being locked into a long-term contract. An attorney can also help to negotiate a clause in the lease that includes an “out,” just in case the lease must be terminated early.

6) Increasing Demand Forces Leadership to Suffer

When a business grows too quickly, leadership can suffer. Sometimes this cannot be blamed on the company’s founders, who become overwhelmed by the prospect of keeping up with increasing demand. However, when business owners lose focus, clients and employees become disappointed and disillusioned. As a result, organization and budgeting suffer, advertising and marketing falter, and everyone feels overworked, yet their hard work is in vain.

One way that new business owners can attempt to solve this problem is through outsourcing. Business owners should feel free to delegate some managerial tasks to others, as long as they are trusted and hardworking. Scaling processes can also help, as can bringing in some experts to help with the new phases of the business. The business owner alone on an island can spell trouble for a rapidly growing company. However, further tasks and responsibilities can be shared when help is available.

Rapidly Growing Companies Can Succeed

Following these tips should help new business owners deal with the rapid growth of their companies. While customer demand and rising growth can become overwhelming, these conditions can create long-term success if they are dealt with correctly.