The building blocks of entrepreneurship: Rapid business growth

20 Jun 2018


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It’s a problem we would all be happy to have, but one that also needs careful management: rapid business growth. As appealing it may sound, being a “hyper-gazelle”, in growth terms, comes with specific dangers and risks that can be just as problematic to a business as failing to grow at all.

Start-ups are known for their culture of camaraderie and “getting things done”. In my experience, that very culture is crucial to the success of any start-up, but all new businesses should strive to build a close-knit team and working relationships where everyone participates in multiple areas of the business. This is part of being business nimble, which I discussed in a recent blog.

Yet when growth surpasses expectation it brings with it a number of problems. The need for additional staff can lead to disruption in team harmony. The rapid assimilation of new team members, their inductions, their training, their contributions and their new ideas can all be a source of stress to the established team. During this period the demands on each individual may increase significantly, as will the demands on the team as a whole. If poorly managed, this can lead to low morale and infighting among members of the once-unified team.

Having founded a number of businesses, I’m acutely aware that staff go through a kind of grieving process as their roles change. They go from being a member of a small team with daily interaction with their leader to part of a larger group with a new hierarchy and less face-to-face time with their founder. In turn this can feel like something of a step backward in status. As a founder, this is something that takes enjoyment from my role. I value the open and direct communication that working in a small team brings about, and I have little tolerance for the internal politics that emerge as the team expands.

As pressure grows with increasing customer demand, staff training and day-to-day tasks occupy more and more time, there is a risk that customer service will slip. Since it is likely that your excellent customer service was a catalyst for your rapid growth in the first place, an inability to maintain it represents a high risk and a threat to the business.

New staff may also try to cut corners. They may revert to the practices of their previous employers, and they may not have the same values as your current staff. All of these characteristics can (and should) be trained, but training takes time.

As businesses grow, the demand for cashflow is at its greatest and you may well see diminishing profits. This is even more likely to be the case if staff overtime is required to meet demand, or if goods and supplies must be fast-tracked, incurring additional freight and delivery costs.

From the entrepreneur’s perspective, the challenge is to manage all of the above while adjusting your own expectations. If you originally started your own business so that you could choose your own hours, or work around family commitments, then it’s likely that some of these benefits will be lost. There is also of course the inherent risk that without careful growth management strategies, your role could become one of continual crisis management and this could lead you to dread walking into the office every day.

What’s certain is that pursuing a strategy of growth at all costs without understanding the hurdles you’ll have to overcome will hurt your business in the long term.


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