Many people think that a small business is only successful when it’s scaling up and growing. While this may be true, unchecked growth can have detrimental effects on the company as well. There are plenty of examples in the business world where companies grow too quickly without a plan for managing their success, which resulted in them neglecting key areas such as customer service or product development.
Seeking advice from professional companies like Professional Success South in San Diego can help manage the growth.
This blog post will explore some of these pitfalls and show you how to avoid them!
1) Cash Flow Crunch
It can be easy to take on new contracts and clients quickly without thinking about how this will affect your current workflow when you’re scaling up. If your customer base is increasing, but the time between receiving payments from customers hasn’t budged, then you may have a problem on your hands!
Your production costs would increase due to increased volume, and increased costs would require more cash. However, due to the delay in payments, you may not have the necessary money available. This makes managing overhead costs such as employee salaries difficult because expected revenue isn’t coming in when it should. This cash flow crunch can be suffocating for a business and extremely challenging to manage.
2) Failure to Deliver Quality Customer Service
Many entrepreneurs forget that their business is only as good as the service it provides. If they don’t deliver excellent customer service, the customers will become unhappy. This can lead to negative reviews online, which could drive away prospects because they will assume your company isn’t reliable enough to do business with.
It may be common sense, but you need prospective clients to feel like you are providing value before they’ll sign on with any contract, so make sure this happens; otherwise, what’s the point? If word-of-mouth referrals aren’t generated from satisfied customer experiences, someone needs to look into why this is happening and fix things immediately!
3) Human Resource Problems
Excessive growth means more workload on existing staff members, which will create a lot of stress and may make them feel undervalued. This is another shortfall of unchecked growth, employees will start deserting you, and efficiency levels will drop eventually.
You need to be careful in hiring new staff members because the problems will escalate if they aren’t good. Increasing staff might give you extra resources, but it also means increased cost, training, and management.
These are the three main problems that result from unscaled growth. Businesses in San Diego can counter these problems by learning to manage their growth efficiently. Growth management is an essential part of business development for all startups. While the motivational lectures of venture capitalists and investors on returns and growth may sound motivational, you need to introspect and ensure you are lending your ears to the right guys. At Professional Success South, we give you the right advice and help you navigate the rough seas using sound suggestions from our experts. Schedule a free coaching session now!