"You need to grow this business and grow it fast!" So declared one business partner to the other.
Did I mention to you that business fascinates me, especially small business?
Not so much the type of businesses or the sectors they’re in but the way a business grows or fails to grow, purely because of the owner(s) of that business.
So when I heard the above statement, my ears pricked up fast because this business was only 6 months old.
Sometime ago, a business opened on a busy street in our little city, Bridgetown. I thought it was the perfect fit of location, layout and products for the potential customers, who I know would be passing there on their way to the bus stand.
As I expected, the business started doing very well. The store was always busy. It was on the name of the lips of customers, both for the products and service.
Then within less than a year, the owner decided to grow this new business. Look out!
Another branch sprung up in another location in the same small town. And another one in an upscale mall. By all accounts, the owner had it going on! She had hit the sweet spot that all new business owners dream of.
Or had she?
When you start a business, growing that business should be part of your original plan. When it’s not, you must have a good reason to grow your new business, especially in the short-term.
Your decision to grow your new business cannot be “the thing to do”. Neither can it be based on the “envy factor”. (this is when your friend started a business since yours and she is already growing hers and you seem to be standing still.)
If you try growing your new business for any whimsical or envious reason, far from growing your new business, you just might be sending it to an early grave!
So, let me give you 7 reasons why if you don’t have a good reason to grow your new business, you and your business could be in trouble.
You can stretch yourself too thin
When you set up your business, chances are, you did so, based on how much money you had or how much you were able to borrow. Chances also are, that those resources were already limited. And now you want to grow your business, without adding to those resources.
This will result in serious overtrading and lead to your having to borrow more money or worst, close the business. Many small business owners have gone so far as to even mortgage their houses (sometime without telling their partners!)
Your customer service will be affected
When you set out to grow your business “just because” you also impact the level of customer service you provide.
You see, when businesses expand too quickly, the owners are usually unable to hire more staff. So while you get more customers, the wait to be served, the frazzled and frustrated demeanor of the staff, backed by sometimes outright rudeness, soon drive them away.
If quality is an important factor in delivering your customer service, sudden growth in your new business will certainly impact this.
The business can lose its intimacy and character
As the business grows, so might your staff. So, from managing a small, intimate team, you now have a larger impersonal group who are more interested in their paychecks than your vision.
If your growth also includes the acquisition of more space, now your customers no longer know where items are and they begin missing the intimacy that attracted them to the business in the first place.
In other words, the business has now lost its character.
You will be forced out of your comfort zone
The one thing that most small business owners miss when trying to grow their businesses is this: A business will only grow at the rate that the owner develops or grows him or herself.
When you try to grow your new business and you don’t have or make the time to grow yourself, you won’t have the know-how to run this new business and you can’t get back to your old business.
So, you find yourself completely out of your comfort zone. You might have heard even me say that stepping out of your comfort zone is necessary for growth...but in this case it places you right into heart attack zone.
You could get the risk analysis wrong
One of the important things you must do in setting up or expanding a business is to analyse the risk and identify your risk mitigating factors.
If you grow your business too quickly, it is highly likely that you will make mistakes with these even if you seek outside help.
Will you have the time to consider what kind of financial risk you are exposing yourself to in the long-term?
Will you make the time to think about effect inflation and other economic factors could have on your business?
What will happen if anticipated demand falls short of projected sales?
You could lose your family support
My friend, let’s call him Russell, started a business with the blessings and support of his wife and sisters.
The plan was for his wife to delay her return to work for 6 months and help him with his new business. His sisters would help out with caring for their 3 small children.
But in 3 months Russell got an opportunity he could not pass up and everything changed. Long story short, 18 months later, he was still needing his family support, at the same level as when he started.
Since this was not the deal, a lot of frustration set in and his wife gave him the ultimatum to hire her full-time and pay for proper baby-sitting services or she was walking away.
You will likely ignore key business functions
Not that you want to ignore key business functions.
But when you decide to grow your new business soon after start-up, you really are signing up to ignore key business functions like leadership, marketing, planning, Business Modeling, HR Management, the list is endless.
Now over to you to grow your new business...
So I have given you 7 reasons to think twice before you attempt to grow your new business.
Don't think for one moment that if you see a new opportunity soon after you start your business that you should not go after it. You just need to slow down, breathe and at least consider the 7 reasons I shared with you above.
Should you feel like you can't do it alone, why not hire me?
To your new business growth...