According to the Small Business Administration, more than 30 percent of small businesses fail within their first two years.
But contrary to popular belief, not all of them fail because people don’t buy their products and services. Some of them fail as a result of another problem: Growing too fast.
In theory, growing fast sounds like it would be a great problem to have if you’re a business owner. The whole point of starting a business, after all, is to have it grow and make tons of money in the process.
But if a company grows too quickly, it can actually be bad for business. There are lots of fast growing businesses that struggle to fulfill orders from customers and implode before business owners have a chance to catch up.
Are you in this predicament at the moment? Here’s what to do when your business is growing too fast.
Step Back and Analyze the Situation
Do you suspect that your business might be growing too fast?
If so, the first thing you should do is stop everything and take a step back so that you can analyze the situation. There is a big difference between growing and growing too fast, so it’s important for you to figure out if you’re actually in the danger zone or not.
If your company is growing too quickly, there are some signs that will let you know it. Here are some ways you’ll know you’re in trouble:
- You don’t have enough cash available to you because you’re still trying to collect older payments from customers and clients while taking on new expenses from vendors
- Your employees are starting to complain about how much you’re forcing them to work to keep up with the demand for your products and/or services
- Your customer service department is getting flooded with calls from angry customers who haven’t been able to buy your products and/or services
Essentially, if it feels like you’re always playing catch-up and trying your best to get your company current, there’s a good chance you’re growing faster than you would like. You aren’t going to be able to keep up this pace without making some much-needed adjustments.
Avoid Working Your Employees’ Fingers to the Bone
One of the first adjustments you’re going to need to make when your company is growing too fast involves your employees.
Your employees are obviously going to play a very important part in your company’s growth. Without them and their hard work, you aren’t going to be able to build your company into what it could be one day.
With that in mind, you should get into the habit of gauging the employee morale within your company from time to time. You should be especially mindful of doing it during the first one or two years of your company’s existence.
If morale is low, it could be because you’re simply pushing your employees too hard and forcing them to work too many hours. They’re going to start to feel demoralized after a while if you’re asking them to do too much.
You should consider bringing in additional employees if the workload has become unmanageable in your facility. Or at the very least, you should offer to pay your employees more or provide them with other perks that will lift their spirits.
By doing this, you’ll keep your employees happy and motivate them to work through your company’s growing pains. It’ll help you avoid inevitable burnout and allow your company to continue to provide the high-quality products and/or services your customers expect.
Outsource Certain Tasks If You Can
At some point, you might find that there are certain tasks that your employees simply can’t keep up with.
For example, order fulfillment is something that becomes a big problem for a lot of small companies when they’re growing too fast. They struggle to keep up with all of the orders that are coming in and make customers mad by taking entirely too long to ship products out.
If you ever find yourself in this scenario, outsource your services to a company like Fulfilltopia (https://www.fulfilltopia.com/). They can worry about things like order fulfillment, retail distribution, subscription fulfillment, and other things so that you can focus on your day-to-day operations.
There are other tasks like accounting that can also be outsourced if you need to take more off your plate.
Shore up Your Customer Service Department
When your business starts to grow quickly, you’re going to have a lot more customers coming to you for your products and services. Some of them are going to be calling your company to complain about how long it’s taking for them to get shipments from you.
Your customer service department is going to need to be prepared to bring their A-game each and every day. They’re going to need to find ways to pacify your customers while also satisfying their needs and making sure they don’t turn against you.
It’s important for you and the head of your customer service department to be in constant communication about the kinds of calls you’re getting. You don’t want to start losing customers because of your sudden growth spurt.
Create a Plan for Both the Immediate and Distant Future
When you first started your business, you likely had a plan for your first two years. You can officially take that plan and throw it out the window once your business starts growing too fast.
You’ll need to come up with a new plan, both for the immediate future and, maybe more importantly, for the distant future. You should take a look at where you’re at, figure out where you want to go, and find a way to accomplish the new goals you set for your company.
Planning ahead can be hard when you’re growing so fast. But it’s necessary and is the only way you’re going to make it to the two-year mark and beyond.
Don’t Let Growing Too Fast Cause Your Business to Fail
Is your business growing too fast right now? It can be an overwhelming experience and can leave your head spinning.
But just remember: There are tons of business owners out there who would kill to be in your position. So rather than freaking out about it, find a way to facilitate the growth that’s happening. It’ll bring you the long-term success you’re chasing.
Read our blog for additional tips on running a business.