Consider the following for a fast growing business:
More revenue covers up mistakes.
There are companies that are excellent sales organizations. Generating more revenue is not a problem. They have built sales funnels that work. Their revenue is growing quickly. But, growing your revenue quickly is not all good news. More money coming in can also cover up a lot of mistakes.
Fast growth amplifies errors.
When your business is growing too quickly your mistakes are also bigger. Let’s say you have been hiring more people than you could afford. When you only had one employee it wasn’t such a big issue when you had 30 people on the payroll. When your business grows too fast the errors you make turn into larger errors. You might not feel the negative impact of your mistakes immediately, but they will end up hurting your business nevertheless.
Here are some examples how growing your business too quickly can hurt your business:
- If your customer acquisition cost is too high, you might not have noticed with you first few customers. If your business grows too fast, you simply won’t be able to grow without running out of money.
- You might hire too many employees instead of increasing productivity.
- You might have inefficient processes.
- You could hire too many of the wrong people in order to satisfy your urge for growth.
- Selling more is great, but not if you compromise on quality.
Why is your business growing?
Yes, sometimes businesses grow without merit. It is not the same as winning the lottery, but similar. You might get lucky and land a client without trying too hard. You might land several new clients without making a real effort. All of that sounds like a lot of fun, but the new business could quickly land you in hot water.
Growth that is not the result of planning and systems is going to hurt your business.