Fast growth vs slow growth
The idea of your business growing too fast can be a bit daunting and overwhelming. The idea of your business becoming boring, predictable and stale is also far from desirable. So, what is the best approach to such an important topic that can make or break your business?
The answer will depend on several factors; what stage is your business at, your resources and how comfortable you are with taking risks as an entrepreneur. It also depends on the kind of industry your business is in – tech start-ups, for example, can reap huge benefits from fast growth while a small local business might find growing slowly more adequate to its goals.
Slow and steady is often deemed as an ideal way to approach a new business: getting funding and investing in the safest ways, having a small team of employees, start with a small number of products or services that can easily be improved or adapted, it’s easier and safer to smooth out any possible kinks in the business model, you have the time to properly prepare your team, and keep that flame burning steadily for a long time.
What are the downsides to slow growth?
When a business is moving slowly and steady, there is often a tendency to get comfortable and get a bit negligent with innovation, staying on top of what’s new in the industry, what the competition is doing or what are the customers looking for now.
There can be a tendency to focus on the comforts of short-term profitability and not invest in new tools, new tech, new campaigns – ignoring these will harm your chances of staying competitive.
The slow turn out of profit may also discourage investors from supporting your business, or even getting bank loans if they perceive your business as being stagnant rather than slowly growing.
Your team may become a bit less motivated or less productive because it’s the same old routine every day, there’s no new stimuli and nothing new to learn. Your team may be too small, and at times it might even be more profitable to outsource than to hire someone for a position in order to keep the ball moving.
Don’t risk becoming a stale business. Don’t get too comfortable with your current business position and always be willing to try something new to keep it fresh and exciting for the market and customers.
So is Fast Growth the Better Option for my Business?
Fast growth also comes with a number of risks that you need to take into account.
If the demand for your product or service blows up without proper contingency plans, you may run into several problems while trying to keep up with demand. If you are not careful overseeing your operations and if you’re not prepared for a number of situations you might fail at hiring the right amount of people with adequate training to do the job, or end up not having enough cash flow to purchase materials, equipment, etc. These will make customers and investors unhappy and lose trust in your brand.
Don’t forget to look after your team; the risk of burnout is considerable in fast-growing companies. It’s fundamental to hire the right people, but also to invest in their training, task distribution, respecting their schedules, and outsourcing whenever it’s necessary. Otherwise, you’ll have an exhausted, unproductive and unmotivated team delivering mediocre work.
To keep a lot of these issues from happening, you will often need extra investment from your investors which might not always be ideal or won’t be easy to attain in conventional ways.
So Which One is the Best for my Business?
You don’t need to necessarily opt for one over the other. The best option is always to find a balance, the most realistic and sustainable option for your business to grow considering the factors mentioned above.
Taking that into consideration, here are some tips on how to avoid some of those previously mentioned mistakes:
Plan for the worst (or the best)
Try to imagine a number of different scenarios with both bad and good outcomes (i.e. you’re a wedding planner and it’s going to rain, or one of your products went viral and you need to quickly answer that spike in demand) and develop contingency plans for those scenarios – make them flexible so they can adapt to a larger number of situations.
Properly train your employees
so they can be autonomous and learn how to make the best choices without depending entirely on a superior. Train them on how to improve their sales, give them all the strategies they can use to improve their productivity and their value for the company.
Don’t be afraid of testing and trying out new ways to do things
For example, if you’re an e-commerce business you can try out new ways to present your products and use A-B Testing to see which way of displaying the products gain more clicks, or you can make adjustments to your marketing plan, test them and improve them over time so you don’t fall behind your competitors.
Don’t shut down every idea and proposal
Sometimes it’s hard to break out of the routine and take a risk. Sometimes your employees will give you really interesting suggestions, or even if they’re not incredibly pertinent ideas it can still be a good move to consider them. This will make your employees feel listened and like their opinion is taken into account, that they are bringing value to the company. If you’re constantly shutting down these suggestions, they will be less engaged with their work and become less motivated and productive, or consider leaving for a more stimulation company.
To conclude, take the time to determine which of these approaches is better for your business by taking into account your objectives, your resources, your employees, your investors – you can even pick and take which strategies are more fitting to your business. You have nothing to fear if you keep things balanced and stay on top of everything.