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Common Dangers Faced By Growing Businesses


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Many entrepreneurs believe that if they can just survive for that first year or eighteen months, they will be able to dream of a prosperous future. The truth is, however, that while many businesses fail in their first year, more problems happen when they start to grow. It’s one thing to get by as a small company, but another entirely to achieve successful growth.

Here are some of the most common dangers you will face:

Changing business conditions.

The marketplace is an ever-evolving entity, which can cause serious issues to businesses wanting to grow. The market research you do at this point is likely to show different results from when you started. And, in six months time, it will probably change again. There is a lot to consider. For a start, there’s the obvious fact that consumer tastes are always developing and changing. And, they are often quick to find different sources for their favorite products if they can get them better and cheaper. Your competitors will also be taking notice of what you do, and will adjust their offerings to compete. You might have lofty ideas that your product and services are perfect. But, there’s nothing stopping someone else from doing better.

Cash flow problems.

You need your finances in order if you want growth. But, you can’t get the money you need to grow without attracting more customers. It’s a perennial problem with all businesses, and there are usually only a couple of ways things can pan out. Either you fund your business from your savings, or you look to borrowing money. Each of them can cause issues, and will put you or your business at a lot of risks. You may even find yourself handing over a large slice of your company to an investor. If it’s a significant amount of cash, you can expect them to want more control, too. Straight away, you can see that once you start to grow things might never be the same again. It’s why many small business owners prefer to keep things ticking over.


How are you going to handle growth in your business? There are the new customers, of course, which means hiring more staff and being more productive. But what if you start making more stuff, and people stop buying? You will be making no money and still have to pay for your full-time employees. It’s a fine line to balance on – but it’s not the end of your problems with volume. You will need to buy more materials for your production, for example. And, even the amount of admin you need to do will increase. Take your legal paperwork, for instance. The more customers, suppliers and employees you have, the more contracts you will need to create. You can get help with an admin assistant with some contract lifecycle management experience. Or, you can outsource to a third party to help with your HR needs. The main point is, there is a lot more to do and keep tabs on than you might think.

Service issues.

Of course, one of the biggest issues faced by growing companies is that standards can often slip. It can prove disastrous. Let’s say you sell handmade crafts, and meet a manufacturer that might help you increase your volume. You start selling the new versions of your product, but people just aren’t buying it because the quality isn’t quite right. You end up with lots of stock, no profits, and an expensive contract to see out. It could end up being the end of your business. It’s so important to take growth slow and steady – it always wins the race. Jump too fast and you will encounter more customer service issues than you can imagine. Your clients may not like the new direction you take, which is OK – as long as you have new ones. You don’t want to be in the situation where nothing you do appeals to anyone.

Staff issues.

One final point about growth – and it’s to do with your employees. Not everyone reacts well to change, and some may feel threatened. You may need to bring in outsiders to help you through your growth period, which can upset the atmosphere. You might have to bring in people with the right skills to oversee others who used to be in management positions. And, if you are getting help from an investor, you may encounter the same problem yourself. If you don’t have the skills or experience, they may demand that you answer to someone else. It’s the price many entrepreneurs have to pay if they want to achieve their goals.