Handling Business Growth? Overcome Your Business Growing Pains!

Good companies grow. But sometimes that growth is difficult to manage. In this article, we'll look at six ways that companies can grow beyond their capacity (which in turn could lead to trouble). We'll also look at ways to reduce or eliminate those problems altogether.

I have three scars, about one inch long, on the outsides of my knees. I’m told by my doctor that they are stretch marks from when I was a teenager and my bones were growing faster than my skin could keep up. It seems unusual, but apparently it happens.

I know it happens in business, too. Sometimes things grow simply too fast in some areas while other areas are unable to keep up with the growth. This can lead to problems. But these problems have solutions.

  1. Lack of cash: This is a crucial problem in growing businesses; customer demand is great but your income hasn’t yet matched it. This is one significant reason that a majority of businesses fail within the first two years.
    Solutions: plan carefully for growth and don’t take on more than you can handle (although that’s easier said than done). If possible, have a reserve of cash or an angel investor on speed dial who can help you out in this situation.
  2. Infrastructure: When your business is overwhelmed it can result in servers operating at capacity or simply not enough phones or people to answer them.
    Solutions: Once again, planning is a great way to proactively avoid this situation. Also, something as simple as all calls going to voicemail might be a good solution for a day or two while more phone lines are wired in. Another solution would be to contact a placement (or “temp” agency) to get staff to simply answer phones.
  3. Change in customers: This can happen if the market changes unexpectedly. If your inexpensive product suddenly becomes expensive, you may not see a reduction but you’ll certainly see a shift in customers. This isn’t bad but it will affect how your entire branding and marketing efforts are done.
    Solutions: It’s hard to plan these unexpected events. Instead, just keep your finger on the pulse of your business and watch who comes in your door or clicks on your site. The longer you do this, the more quickly you’ll notice when it happens.
  4. Lack of direction: This can happen when your business grows so quickly that you surpass your goals within months instead of years. Many businesses wish they had this problem but the businesses that do end up floundering around. Money gets spent unwisely, customers become improperly served.
    Solutions: When planning, plan your business for regular anticipated growth, as you likely already have. Then plan a negative contingency plan in case business grows more slowly and a positive contingency plan in case business grows more quickly.
  5. New competitors: In a growing industry you can expect an increase in competitors. These competitors can steal your business.
    Solutions: Leverage your experience and your first-to-market advantage through advertising, better service, and innovation.
  6. Supply chain: Companies get hit hard in this area, too. If your supply chain supplies you with 5 widgets a day to sell and suddenly there are ten people buying ten widgets a day, your supply chain needs to step it up.
    Solutions: If it’s not too costly, keep an inventory on hand. Otherwise, keep the name of a supplier on hand in case of emergencies. If necessary, buy retail and take a loss to serve your customers until your supply chain catches up.

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