There is enormous truth to the old adage that building a business is a marathon, not a sprint. Unfortunately, too many would-be entrepreneurs fall prey to the urban myth of the overnight success. While you may reach a point where just one critical decision or deal puts you on the map and thrusts you into the public eye, businesses that actually survive that moment generally spent years, if not decades, preparing for it. While business growth is generally a good thing, if you scale too quickly it could actually be to your detriment rather than your advantage. Here are three clues your business may be scaling too quickly.
You aren’t hitting your success metrics
A business is similar to a ship on the open sea. If you try and steer by sight or instinct, you will soon find yourself lost, floundering, and making little if any forward progress. Instead, you need to chart your course as you go based on something immovable and fixed. This is why it is very important to set time, volume, and revenue thresholds for your company well in advance and chart your course accordingly.
Expenses outweigh revenues
Expansion comes with many of the same risks as an initial startup. In a sense, an expansion is like a mini-startup. As the business expands, expenses also rise. Just like starting up initially, you generally have a period of solid outflow before you see a return. If you can’t generate revenue quick enough to cover expansion costs, however, you could be in trouble. At that point in time, you may find yourself having to take on more debt than you can handle, which can ultimately tank your endeavor entirely.
Customer complaints are on the rise
One of the benefits of being a startup is the personalized attention you can give to clients and consumers. As your client base grows, however, it leaves you with less time to devote to each one. While a certain amount of decreased attention is unavoidable, if you start neglecting your clients too much because you are juggling too many balls, you may quickly find yourself losing your customer base entirely. No new or expanding business can survive the sudden loss of their most valuable clients or consumers, so pay close attention to complaints.