When we create a company, we prepare for the worst. However, it is not only necessary to know how to manage failure; we must also learn to grow. There comes a time when the business begins to bear fruit and progress, and it is necessary to make certain decisions that can change the company’s direction forever. The dark side of triumph is that success can also die.
Recently, we opened the year, and one of the most repeated goals among entrepreneurs is to grow: increase customers, hire more staff, and start selling abroad. Being ambitious and setting goals is fine, but if you know how to leap.
What are the Risks of Business Growth?
You must grow with your head, and for that, the first step is to know the risks or inconveniences that can maximize your business. Then, you will have to create an expansion strategy, which gives you room to maneuver and learn how to act when the time comes to grow.
These are some of the most frequent errors in business growth:
Making bad decisions
When the goal is to grow a lot, and quickly, they end up hurriedly making big decisions. Remember that to achieve sustainable growth, it is necessary to analyze each movement very well, which takes time.
To be indebted more than the account
“To make money, you have to spend money.” How many times have we heard that expression? In a way, it is correct. The thing is that you need to invest to be able to grow. However, you must be incredibly careful with the risks you assume, even more so if you are autonomous. Remember that with this legal form, you have unlimited liability. That is, you respond to the debts with all your assets. Do not play roulette!
Oversize the business
You grow, see that the company works, and want to continue growing to infinity. But what if your business model has peaked? Many employers mistake hiring more staff than they need, expanding a workspace they will never complete, or buying more products than they can sell. If you do not want the same thing to happen to you, go step by step.
Worsen relationships with customers
Sometimes, we want to be like Juan Palomo, especially if we are alone in the business. However, “I eat it, I eat it” has limitations. Accept that you are not a superhero and will need to share your efforts. When all the activity is focused on the expansion plan, it is easy to worsen the quality of the products or services and personal relationships. Loyalty to customers must be a priority. Otherwise, you may manage to grow on one side, but you will be losing on the other in the meantime.
Hire the wrong people
Human capital is essential in a company. The problem is that the rush can lead you to neglect this aspect. If you need someone quickly, one solution is to start with a temporary contract or even with an external collaboration that allows you to evaluate the quality of the worker.
Manage the organization in an inoperative way
This is a frequent difficulty, especially for businesses that sell products instead of services. A small error in the supply chain can have profound consequences, such as excess or lack of stock, loss of income, waste products, etc. In this sense, it is advisable to increase the business progressively and not underestimate this type of task. Growth requires expanding the means to manage the supply chain, from personnel to technological resources.
Chaos management
Many great people and civilizations in human history did not become great overnight. A famous saying goes around: “Rome wasn’t built in a single day, but they had to work for it every single day.” Also, these great people and civilizations were extremely good at chaos management.
Lack of chaos management can eventually become a significant hurdle to your business growth. An entrepreneur or manager should have this characteristic of managing well in chaotic or uncertain situations. Many people panic when the situation becomes challenging to manage. But that is the death of business growth. One should never panic in tough times. Instead, they should maintain their calm and make decisions with utter composure.
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