2 min read
Scaling a business is exciting for business owners, signaling significant growth. However, it’s imperative that this growth is handled well. Indeed, the answer to the frequently asked question “what happens when a company grows too fast?” is, regretfully, “a great number of pitfalls”.
In this post we’ll run through the most common mistakes companies make when scaling a business too fast, so that you can avoid them on your own growth journey.
What happens when a company grows too fast?
You can get sidetracked by new ideas
As your company rapidly expands, it’s easy to get drawn in by the myriad of possibilities for the future. While increased opportunity is exciting, it’s far too easy to get sidetracked by new ideas and forget to focus on the essentials. Avoid this by maintaining focus and not getting sucked in by too many new ideas.
You can fail to prioritize
Similarly, as new opportunities pour in, entrepreneurs may find their focus shifting from sensible business scaling to exploring the range of attractive business opportunities now available to the. Staying disciplined and prioritizing the things that need to be effectively managed and monitored during rapid growth can help prevent a number of pitfalls down the line.
You can lose track of your goals
Scaling can often lead to convoluted ideation. It’s important to keep your goals at the forefront of every decision you make so that you can effectively achieve them.
You may fail to test the market
As your business grows you’ll likely gain a lot of confidence in your own entrepreneurial skill and instinct. However, it’s a big mistake to think that you don’t need to test the market before venturing into new territories. Don’t forget to carry out market research, run focus groups, and gather customer feedback to ensure your market strategy is on point. Failure to do this can result in catastrophic losses and cash flow issues.
You might not log all processes
CEOs of companies that grow too fast often forget to accurately and thoroughly document different processes involved in scaling. This can cause errors during recruitment, disorganization during onboarding and generally slow down business growth. While you might feel swept off our feet, make sure you take the time to log and document all processes for the sake of your future self.
Hiring too quickly
When scaling a business, taking on new employees is an inevitable requirement. However, don’t panic and try to do this too quickly without taking diligent measures to endure you’re hiring the right person for the job. Indeed, bad hires will be costly for the business down the line. Take your time to run a thorough and exhaustive recruitment process to ensure you have the right personnel onboard to grow your business smartly.
As your company starts rapidly growing, it can feel like there’s an overwhelming amount of work to do, from ideation to pursuing new revenue channels. However, make sure that you are not overworking your staff to the extent that they are becoming less productive and over-stressed. This will result in a halt or slowing down of growth as the team is simply stretched too thin. Instead, prioritize the tasks that need doing, ensure staff feel supported, and hire new employees as and when you need to.
Failure to provide adequate training
A big problem for companies that grow too fast is that they neglect employee training. This means a significant portion of new staff don’t feel equipped to do their job satisfactorily, leading to poor productivity and staff liability. When taking on new recruits, it’s imperative that you provide them with thorough training so that they feel confident doing their job well. This will invariably boost productivity and efficiency in the company.
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