While exponential growth is in most cases every business owner's dream, it can paradoxically turn into a nightmare and, in the worst case scenario, kill the business. When a company is young and small, it usually means few employees, few products, few customers and few suppliers. The company's operations are transparent and manageable. But these parameters change as the company grows - and especially when growth accelerates, founders and owners will experience a number of challenges that can hinder a happy ending to the growth story.
Focus on company culture and your talent
Many leaders consider culture to be the "soft" part of business and focus mainly on business plans, sales figures, product development, capital expansion and neglect and underestimate the importance of establishing a strong company culture and core values - not to mention maintaining it as the company grows. But "Culture is strategy for breakfast", as the saying goes.
A strong company culture not only attracts new talent, but more importantly, retains the current talent that has helped create the success the company is experiencing in the growth phase. Additionally, there are also high costs associated with employee turnover, so not having to constantly spend resources on finding and training new employees also has a positive impact on your bottom line.
It's a natural consequence of growth that the number of employees multiplies and affects company culture. Successful change is driven by leaders who respect and understand the company's culture and the role culture plays in the process.
Solution: Avoid creating a new company culture by randomly hiring employees during a growth phase when the company is in dire need of new employees to meet increased demand. Stay focused on hiring not only the right skills (more on this later), but also the right people who will contribute positively to the company culture you want to maintain and create.
Employees are the foundation of your business. And employees working around the clock to meet increasing demand can be a recipe for disaster. Employees who have to work overtime on a daily basis won't be able to perform at their best, deliver quality, they'll become stressed, and you may experience employee turnover. So, make sure you find more hands as soon as possible. This may sound like a contradiction to the advice above, which says that you still need to be thorough in the hiring process. If you find yourself in a situation where it's difficult to find the "perfect new employees", you may want to consider outsourcing parts of your product/service to subcontractors or hiring freelancers for a short period of time. A more expensive solution in the short term, but we believe that in the long run it pays off not to have stressed and overworked employees.
In Forbes' article "12 Challenges Facing Fast-Growing Companies" here, you can read how founders of fast-growing companies point out that attracting the right talent is a major challenge for fast-growing companies.
Managing your company's cash flow
Growth is great, of course, but it also puts pressure on your business. Growth is actually an expensive business. Because when sales increase, it automatically means that more money is needed for suppliers, employees, inventory, etc. Growth can easily put pressure on a company's cash flow, which is why it's crucial for companies with expansive growth to continue to manage and control cash flow. As a business owner, you will naturally be excited about growth, so it's a good idea to involve an accountant, for example, who can take a realistic look at the financial side of growth.
Stay focused on innovation and development
As already pointed out, expansive growth is likely to affect company culture, and it's perhaps the 'start-up' and/or 'firebrand' mentality that is in particular danger of drowning as the company grows larger. Bigger business often means more bureaucracy and a growing distance between thought and action. Make sure you create an environment that still encourages innovation and development and isn't killed by too much focus on selling and delivering goods. Times change, so do consumer and business customers, and if you don't meet new needs from the market, you'll find that sales will eventually dip.
One solution could be to simply hire a team of employees whose sole purpose is to develop and invent new products or services. This way, you ensure that your company remains focused on innovation and what your customers will want from you in the future.