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4 reasons why your company shouldn’t grow too fast


It’s this the dream of every entrepreneur: a vertical take-off with exponential growth. But it isn’t always the rockets that ultimately soar the highest. Companies that grow slowly but surely often come out ahead in the end.

The first major challenge facing company founders is to get the business off the ground. Nearly half of all bankruptcies occur in the first two years after start-up. But once the initial hurdles have been overcome and success is within grasp, it’s often tempting to go all-in and expand as quickly as possible.

Don't play all your cards at once. That’s not usually the right way to get a company on track and growing.

Instead, take it slow and steady. There are a few reasons for this. Or to put it another way: There is something to be said against growing too fast. We’ll show you the top four.

1. Customer service that’s overwhelmed

Sales are good, the outlook is rosy. It’s all too tempting to grow fast and expand. But before you do, make sure your employees can handle the growth in the first place. Small businesses often have excellent customer service, which is the foundation for their success. But what happens when customer service staff can’t keep up with the pace of growth? You’ve got a company on your hands that no longer meets the needs of its customers and risks losing them to the competition.

2. Cash flow that’s unpredictable

Positive cash flow is one of the keys to long-term success of a small business. But grow too fast and too soon and you may not be able to pay your bills. Even if it doesn’t bankrupt you, your reputation in your industry will take a major hit.

3. Focus that’s been lost

When you succeed, it takes your breath away. But don’t let your euphoria distract you from your original goals. Whatever you do to grow, always make sure it’s in line with your goals. Only if your growth strategies reflect what drove you in the first place will you succeed in the long run.

Hard work + cost management + thoughtful growth = Long-term success.

4. Employees who’ve been alienated

Losing employees and having to hire new ones is an expensive process and often spells the death knell for small businesses, especially in the first year or two. If you grow too fast, you run the risk of frustrating and alienating your employees. So don’t be surprised if they walk out on you. Once they’re gone, you’ll experience first-hand just how much it costs to find and train new employees. And you don’t even know if they’ll be as good a fit for your company as their predecessors were. The solution: Always keep your employees informed about your expansion plans and take their interests and feedback seriously.

For small businesses, there’s a very simple rule: Hard work + cost management + thoughtful growth = Long-term success. It's that simple. If you’re one of the lucky ones who’ve been riding a wave of success from the start, don’t reward yourself too soon. Consider your next steps carefully. Whatever you do, don’t overdo it! Only ever grow as fast as your business can keep pace. It works. Just ask those who’ve done things this way and succeeded.