Most companies and venture capitalists have an obsession with growth. Small businesses finding their way are often forced by “industry experts” to pursue growth beyond their potential. This excessive fixation on growth causes more harm than good to businesses as sustainability becomes a primary concern.
As a small business, your only goal should be to achieve sustainable growth in the long run. Achieving sustainable growth requires the right mix of strategy and foresight, a trait found in all successful businesses.
This blog post simplifies growth for you and explains how excessive growth can signal trouble for a small business. We will explain the benefits of sustainable development and why small companies should implement sustainable business growth strategies. Additionally, you might want to seek help from professionals like Professional Success South in Los Angeles, CA.
The Disadvantage of Excessive Growth
Small businesses are often not as adept at tackling complex situations as established companies. The resources and skillsets available to the established companies mean that they can navigate their way out of tricky situations; the same cannot be said for small businesses.
The desire to grow business is quite natural; however, here are some disadvantages of eyeing excessive growth as an SME.
- Shortage of Cash
Small businesses may need to borrow cash to meet their expansion plans. Costs such as buying new property or equipment may leave your business with very little money in hand.
Another problem with increasing production is that it quite often leads to a decline in quality. Compromising the quality is suicidal for small businesses, as they have to create a reputation, and the inability to manage expectations may lead to potential failure.
A larger business means a larger workforce, more equipment, and facilities and more significant investment. The increased capital requirements make it difficult for a company to decide as they have a lot on their plate.
- Loss of Control
You will need to delegate key responsibilities to other individuals as the business grows. Delegating control to others means you can’t do everything as you want.
Why Sustainable Growth?
The disadvantages of achieving too much in very little time mean that you need to eye sustainable growth for better results.
You should never turn down additional sales. There are different options you can follow to meet the rising demands. Here are some actions that you can take to ensure that your business can achieve sustainable growth.
- Sell equity.
- Raise finances with the help of debt financing.
- Increase your profit margin.
- Decrease total asset turnover.
All these options come with their own sets of challenges, and you need a professional to guide you through the complexities that follow.
Professional Success South helps small businesses in Los Angeles, CA, achieve their potential by providing free consultation and practical sales advice. Our experts use the latest methodologies to boost your business’s revenue and ensure steady progress.