Starting a business and nurturing it to profitability is a major feat. You’ve got both feet in the water, and you’re probably ready to see what else you can do. Expanding your business is a common next step for many profitable businesses, but it can be dangerous if you come in without proper preparation. Growing a business too fast can actually lead to bankruptcy if you don’t have all of your ducks in a row. If you’re getting ready to or are in the throes of expansion, and you notice some common symptoms of defeat, you may need to slow down or stop entirely.
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Inadequate Cash Flow
Growing a business requires a lot of cash on hand. You’ll have major overhead increases, including payroll, supply chain, marketing, and debts. If you’re coming up short when paying bills, taxes, payroll, or other important regular expenses, it’s a clear sign you’re in trouble. You’ll need to reassess your finances and priorities to ensure your employees are paid and your business can perform well.
High Employee Turnover
If your employees are continuously quitting—or complaining—you may not be leading them properly. Poor leadership can often happen when a business grows too fast. You’ve got too much responsibility on your plate, and you don’t have time to train new hires or foster a positive workplace culture. If your cash flow is inadequate, you may not pay employees on time or pay them what they’re worth, leading to high turnover. When employees quit, you’re also spending a lot of time and resources hiring new team members. As a result, hiring standards can become lax, which leads to even more turnover and poor quality work.
Influx of Negative Reviews
It’s normal for any business to receive a negative review on occasion. Negative reviews are often valuable insight into a customer’s point of view, and some feedback can help you improve your business. However, if more negative reviews are pouring in instead of positive ones, you may want to pay attention. Customers are more likely to leave bad reviews instead of good ones, but there shouldn’t be an overwhelming ratio of negative to positive reviews. A steady stream of poor reviews could indicate that you’re cutting corners with customer service or service quality. Take a look at what the reviews are saying, and work on fixing that aspect of your business before it is too late.
Consistent Quality or Equipment Issues
When you expand too fast, your resources are thinned out. You may have to cut corners to meet client or production deadlines, causing a drop in quality. You may be overworking any equipment or tools you use, causing them to wear down faster than you can repair or replace them. If your equipment parts aren’t lasting as long as they should, you may be skipping proper maintenance, leading to downtime and disrepair. For example, a forklift in good condition can last decades with proper maintenance; if you’re experiencing frequent breakdowns requiring major work like hydraulic cylinder repairs, it could be a sign you’re spread too thin and skipping routine maintenance.
Abandoned Plans or Goals
A solid business plan is a blueprint for your goals and size aspirations. When you grow too fast, your business plan may become inaccurate or obsolete. If you update your business plan quickly, it can help you get back on track. If you’ve abandoned your business plan and are growing without a solid agenda, you’ll lack direction and likely make choices that won’t be healthy in the long term. Abandoning business plans or goals can impact your success in a major way.
Inability to Say No
Many entrepreneurs are eager to grow their business and reach new heights, especially when it comes to profits. It may be difficult to decline any opportunity for expansion or new clients. If you have trouble saying no to partnerships or projects, this could steer you into unsteady waters. You could take on more projects than you can handle, or accept a project that is out of your realm of expertise. It’s healthy to decline opportunities as you grow; not every project is for you, and it’s much better to assess your finances, availability, and expertise before accepting new jobs.
Conclusion
Wanting your business to grow as quickly as possible is ambitious, and that’s not a bad thing. However, when you cut corners and grow too quickly, your plans can backfire and require you to slow down even further. Before growing your business, make sure you have cash flow, dedicated employees, and solid goals and plans. Don’t cut corners when it comes to hiring, maintenance, or quality control. Know how to say no to opportunities you can’t handle. Scale up slowly, not as fast as possible. Don’t be afraid to hire new team members that can help you grow on a manageable scale. You don’t want to be stretched too thin; it can be the end of your business for good.
