by Andy Roe, General Manager of SurePayroll, Inc.
Most business owners look forward to the day when they can expand. In their mind, this means things are going well and the company is on track to do bigger things in the future.
But have you considered the risks associated with growing your business too quickly? Here’s the primary concern: fast growth could hinder your company’s ability to stay on course.
If you’re not careful, if you don’t plan out every step, rapid growth could be the downfall of your business. Here are four risks to watch for:
1. Losing your financial footing.
When your business is small – just you and a few employees – it’s easy to keep a solid grip on your finances. You know your income and expenses. You know when you’ll be paid. And you know how much you need to spend.
However, once you begin to expand, it’s more difficult to keep a pulse on the financial well being of your company. It can lead to additional spending and it takes extra work to make sure it’s all going to the right places. It may take a dedicated employee to help keep things in order.
Some small companies even begin having trouble collecting payments on their services.
As you expand, don’t ever lose sight of your numbers. This is the lifeblood of your business.
2. Hiring just to hire.
More employees means more success, right? Well, not always. While the ability to hire more workers may signify growth, it doesn’t necessarily mean it will pay off in the long run.
When you hire just to hire, you take the risk of bringing the wrong people into the company. Soon enough, this will have a negative impact on the business as a whole.
Payroll also tends to be the biggest expense for most businesses, so tread carefully.
Stick to making quality hires, even if it means you have to slow down. This is the best way to ensure positive results in the future.
3. Slacking on customer service.
Even as you turn your attention to growth, you must still keep your customers happy.
Treat every customer like they are your best customer. Treat every customer just as you did on day one. When you take this approach, customer acquisition and retention will remain on par with what you’ve come to expect.
4. It may not be what you want in life.
Think back to why you went into business in the first place. Was it to achieve tremendous growth year after year, or to have control over the lifestyle you want?
Maybe you only want to manage a company of a certain size, and the demands that come with anything more than that might be too much.
Being an entrepreneur and a small business owner means taking on a lot of responsibility. Growing too quickly could push those demands past the point of enjoying the work.
That’s one of the nice things about being your own boss – you set the expectations and goals.
It’s easy to believe that growth – especially fast growth – is always a good thing. Unfortunately, this isn’t always the case.
We’ve seen even large international chains find out the hard way that rapid growth and expansion can cause more harm than good.
You don’t have to shy away from growth because of the risks, but make sure you know what this will bring, and that you have a plan for dealing with anything that comes up.
Andy Roe is the General Manager of SurePayroll, Inc., a Paychex Company. SurePayroll is the trusted provider of easy online payroll services to small businesses nationwide. SurePayroll compiles data from small businesses nationwide through its Small Business Scorecard optimism survey, and exclusively reflects the trends affecting the nation’s “micro businesses” — those with1-10 employees. You can follow Andy on Twitter @AndrewSRoe.