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How To Avoid Being Crushed By Your Rapid Business Growth

by Ronald Wolf Business Consultant

You may find it a surprising fact, but it often happens that a business gets crushed by its own rapid growth. When a boom happens, many things change. You start taking up more commitments than you used to all at once, watch as customer orders flourish, and sign fruitful contracts in no time.

But behind all these amazing events lies the fact that you are going to need a bigger cash flow, proper financing, and a plan for your growth. Growing too fast may find you in a position where you don’t have enough money to deal with all the financial obligations that are vital to your business.

Define the objectives of your growth

The first step is to come up with the right strategy that will encompass your company’s growth. You need to ask yourself some of the basic, yet essential questions.

Do you have the capital that can support the growth that is going on? Is your expansion happening too fast? Are you managing your cash properly, and are there any problems in that field that you need to take care of? Is the growth happening because it’s a profitable solution, or just for its own sake? Are you hiring too quickly? Is your inventory up to par with your growth? Is your production line productive? Is your management team competent enough to handle the expansion?

Keep your focus on customer experience

Your business operations may suddenly be affected by the growth, but it is of an essence that you don’t forget about maintaining a positive customer experience. It isn’t uncommon for rapidly-growing companies to allow their customer service to drop in quality during the whole process.

However, it is very important that you keep on delivering on your promises, as you really don’t want to start losing customers due to your business expanding. If it is necessary, you can hire temporary employees or outside partners that can help you out during this time. Keep your focus on the customer feedback, and don’t let the value of what they get diminish.

Stay aware of your finances

Many questions arise when a company is going through an expansion. You need to ask yourself whether your pricing is still on target, which products and clients bring the most profit to you and which actually cost you more than they are worth, whether you truly comprehend the cost of each sale, how will future cash flows be affected by all the new investments, and how scalable your business model is.

Your previous calculations were probably somewhat easy. Now you’re going to need expertise and spreadsheets in order to stay focused. It might be a good idea to partner with a financial expert who can help you deal with all the financial issues that come with a company’s growth.

Think about relocation

As you will most certainly be hiring new people, you will need to think about moving to a larger office space. While it is bound to require an investment, it is unavoidable, and makes sure that your every employee has enough space for them to do their work and truly be productive.

During the relocation process, there will be excess items and equipment. However, it would be a terrible idea to sell them and then be forced to invest in new ones once you start needing them again. Look around for affordable storage facilities and use one for safekeeping items that you might need to use again in the future.

Do a forecast of cash requirements

It is essential that you do a forecast of cash requirements that you will have in the future. You can do this by analyzing your cash inflow and outflow. This will enable you to evaluate your current financial situation and determine how it can be improved. It may be possible for you to restructure your debt, turn the assets that you haven’t used into money, or get bonus financing for working capital.


Business growth tends to be very chaotic, but it’s not something that is beyond your control. When you ascertain why it is happening and what the consequences may be, it becomes simpler to decide what steps are needed to be taken. Expect anything, and learn from it, so whenever your business starts to rapidly grow, you will be prepared.


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About Ronald Wolf Freshman   Business Consultant

11 connections, 0 recommendations, 32 honor points.
Joined APSense since, January 10th, 2018, From Perth, Australia.

Created on Jan 30th 2018 06:10. Viewed 675 times.

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