Scaling Fast: The Quickest Way To Kill Your Business

Understanding what it means to scale too quickly and how to mitigate against it.

There is no greater feeling than watching your business scale quickly. However, speedy growth may be a bad omen.

Do you know that about 70% of startups fail because they scale too quickly? But in such a cutthroat business world, what does it mean to scale too quickly?

When a business expands faster than its product or business model can mature that business is scaling too quickly.

Common signs are

Overhiring

it is very tempting to hire more employees when your business seems to be on an upward spike.

Inadequate Customer Service

booming businesses tend to focus more on sales than customer retention. This means that even while the company may be hiring more employees than ever, the customer service, which is at the heart building a sustainable business is left understaffed.

Organisation-wide Burnout

another sign that you are scaling too quickly is when there is a general lack of enthusiasm in the organisation. Growing all sectors of the business when the business is booming may seem like a wise thing to do, but it ends up overworking your employees and creating a toxic culture in your organisation.

Management Oversight

rapid growth leads your organisation’s management to make hasty decisions, such as prioritizing sales over customer retention, spending and expanding faster than its revenue.

While it is easy for a company to scale too fast, it doesn’t mean that all fast growth is unsustainable.

For instance, the company KIND Snacks first started out with its owner, Daniel Lubetzky, trying to grow too fast. After taking on orders that were too difficult to fulfil, and failing over and over, he learned from his failures and later went on to spend two years trying to perfect the perfect organic snack bar.

Going back to the drawing board paid off for Daniel Lubetzky because soon after he perfected the snack bar, he attracted $20 million in funding, which allowed him to grow his company sustainably.

So how do you avoid growing too fast?

Focus on your customers

In a bid to grow it is easy to pay less attention to customer feedback. But customer feedback is the surest way to create a product that creates ultimate value for your customers. It also increases and improves your customer services and by extension your customer retention. Which means more customers make repeat purchases from you. This is one of the most sustainable ways to grow your business.

Stay lean

Do not spend more than necessary, do not hire more than required. When there is a large influx of cash, it is easy to splurge. A secret to sustainable growth is an age-old one, don’t buy more than you need. Also, keep your needs slim for as long as possible.

Don’t React

The market is always moving fast. This should not pressure you to rush to react to market fluctuations or expectations. Take the time you need to get your business model just right before seeking to expand.

No one wants to start a business that wouldn’t grow. However, boosting growth may be the surest way to kill your business. Focus on creating a great product for your customers, and watch them grow your business for years to come.

“Growth for the sake of growth is the ideology of the cancer cell.” — Edward Abbey