Business growth is good, right? Not always.
If you’ve ever seen the television show Shark Tank, you’ve probably noticed that many entrepreneurs go on the show seeking funding to support their growth. They already have a viable business and plenty of customers – in fact, too many customers. What they don’t have is the funds needed to buy enough raw materials or to ramp up manufacturing in advance of new orders.
Funding growth is an important element of any sales and marketing strategy. It doesn’t matter how great your sales team is if you can’t support the increased business. Savvy business owners have a strategy for scaling up growth, including ensuring suppliers, distributors, and vendors can handle increased volume; HR plans for adding, training, and retaining staff; and cash to ensure inventory and staffing are in place ahead of demand.
No one wants or plans to grow themselves out of business, but it happens. It’s easy to get caught up in the excitement of rapid growth, but if it’s not planned for and carefully managed, growth can cripple a business just as much as declining revenue.
It’s one of the reasons we ask clients how much new business they can handle. In some cases, we design marketing campaigns that can ebb and flow to accommodate sustainable business growth.
How fast is too fast? That’s a question for your CFO or accountant to start. They know how your burn rate changes as the business grows and can assist with understanding how you’ll fund expansion. Then, your operations and HR roles can provide insights on inventory/supplier challenges and staffing concerns.
What’s the ideal growth rate for your business? Tell us your story.
