Disaster Alert: The Dangers of Growing Your Business Too Fast


When you are a new business owner, your primary goal is to break even as it opens the door to profits. You are at the point where you have customers who are paying for what you are offering on a regular basis. Your cash flows begin to register inflows. It's an awesome feeling to steer your venture to profits. Profitability drives the next natural goal of the business: growth.

The growth phase is one of the most exciting and most challenging phases of entrepreneurship. The prospects are looking up. You are establishing a footprint on the market. Customers are buzzing, and the sales numbers are incredible. Every business owner strives to develop her business quickly to realize its potential.

Get ready to steer your business through an explosive phase that can make or break it. Take some time to understand the impact of rapid growth, and plan for it. Let us review some of the risks associated with rapid growth.

"Ensure your operational plan is not affected by such glitches. Project your cash flows and prepare for the different scenarios."

"All change is not growth, as all movement is not forward." Ellen Glasgow, American Novelist

Cash Flow Crunch

Your business is getting bigger. There is an increase in revenues. On the other hand, the expenses also get bigger. You spend more on tools and equipment, software, inventory, and overheads among others. It becomes hard to track all your expenditure due to the sheer volume. This injects problems into your cash flows and one month of bad sales could deplete your disposable revenue. Similarly, failing to meet your short-term obligations such as payroll and rent can force you to shut down.

You may face delays in collecting receivables. Ensure your operational plan is not affected by such glitches. Project your cash flows and prepare for the different scenarios. Make sure you can service essential expenditure even during a cash crunch by creating an emergency fund.

Due to rapid growth, your expenditure may surpass your revenues. This is natural as your business prepares to deliver more and quickly. Strengthen your receivables collection department to minimize delays in revenue. It is unwise to have your cash flow dependent on one revenue source, so try diversifying your client base to minimize risk. It can be detrimental if your single big client fails you.

Lack of Financial Groundwork

It is time to minimize exposure to risk, which maximizes returns. Don't take credit to drive growth. Taking a loan increases your business' exposure to risk. There is a fine line between the interest you pay on the high-interest bank loan and the margins you make on your revenues. It is a ticking time bomb waiting to explode when your business hits a bump.

If you are paying yourself a salary, it is critical developing a saving habit. Taking a piece of your profit and allocating it to your emergency fund empowers you to clear debts and reduce risk. If you are running the business from your private funds, saving money and paying off debts it even more important. It is an excellent way to ensure your business does not leave you broke. Putting money aside on both fronts will enable smooth transitions and survival of unexpected setbacks.

Shore up reserves for your operational expenses. This empowers you to ride the bad waves. It will allow you to stay afloat in times when you are not making money. Having a rainy-day fund buys you time to re-strategize and get back to profitability. Usually, in such situations, buying time is all you need.

You can employ professional help for more than just taxes. Strive to stay updated with the latest cash flows. This helps you track your expenses against sales on an ongoing basis.

Risks of Operational Inefficiency

Growing your sales is good for profit. However, it also requires you to do more and faster. A rapidly growing business stretches and bends the inner structures, which are usually rigid. Attention to detail decreases and sometimes quality may become a challenge.

Rapid growth will force you to change the way you run things. A bigger workforce requires correspondingly strong leadership. The shift to the new systems and policies may not be as smooth. Pulling your people from the nitty-gritty to leadership roles might negatively affect productivity. Similarly, small flaws in management will be amplified. Be ready to address hiccups arising from those operational changes.

"Growing your sales is good for profit. However, it also requires you to do more and faster."

Hiring the Wrong People

A vibrant workforce is essential to drive rapid growth. Hiring a large number of people in a short time makes it hard to evaluate everyone properly. Your biggest challenge is to find the perfect person for the job. A rapidly growing business means heavier workloads than before. This reduces the time you put into issues such as employee welfare.

Human resource management becomes a real thing. You will need teams to look after the human capital. This eats a more significant chunk of your budget. In addition, with a big staff, you do not always get an exact match for the position. At times, you are forced to expedite placements to ensure production does not collapse. Don't fall into the trap of hiring inadequate people. It will lead to an organizational mess later on.

Cultivate a company culture that keeps your workforce motivated. Make it clear on what is the acceptable policy. Your new staff may not tick all the boxes in your requirements. Use your judgment to determine who is most useful to your business now.

"Try to keep a close tab on customer feedback. Follow up quickly when the levels of harmful feedback escalate."

Reduction of Customer Service

In fast-growing businesses, the demand for everything rises. This includes your time. You cannot put as much time and energy as before into projects. Success becomes a double-edged sword. The demand is so high that you cannot afford to pay individualized attention to all the projects. Similarly, you might be forced to spend less time even on your special accounts.

This lack of attention also affects your long-term relationships with clients, colleagues and business partners. In addition, prepare for a drop in service quality when you delegate departments such as customer care. Plan to take remedial action in specific circumstances. Poor customer care leads to a decline in business. The link is that customers feel disconnected from your company and may start giving negative ratings and reviews or even jump ship.

Try to keep a close tab on customer feedback. Follow up quickly when the levels of harmful feedback escalate. There is a good chance you can do something internally to resolve the issues. An increase in customer complaints signals a bottleneck in your production chain. Attend to it quickly to avoid losing repeat customers.

Ensure your customer care teams are re-trained and motivated to deliver on your goals. Be on the lookout for adverse ratings. This is especially true in the digital age. Have a policy that outlines how to respond to negative feedback on all platforms. For instance, a proactive reputation management strategy will help you keep your online world free of negative content. It also ensures quick and professional responses to bad press.


A primary goal of every business is profit. Sometimes it makes sense to sacrifice growth to safeguard profits. Rapid growth involves successfully managing high-risk situations. It puts the business under intense pressure from multiple angles. There are steps you can take to ensure your business handles rapid growth successfully. These include planning for expansion capital, preparing to scale up operations on all fronts, engaging the right talent and sticking to financial plans among others.

Ensure that your workforce is aligned to your business goals. This creates a harmony that lets you do business faster. On the positive side, it keeps the employees motivated to deliver beyond expectations.

Rapid growth is a thrilling phase of your business. It promises lucrative returns. Elevate your leadership and learn to ride the rough waves that come with it.

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Do 2020 Presidential Candidates Still Have Rules to Play By?

Not too many years ago, my advice to political candidates would have been pretty simple: "Don't do or say anything stupid." But the last few elections have rendered that advice outdated.

When Barack Obama referred to his grandmother as a "typical white woman" during the 2008 campaign, for example, many people thought it would cost him the election -- and once upon a time, it probably would have. But his supporters were focused on the values and positions he professed, and they weren't going to let one unwise comment distract them. Candidate Obama didn't even get much pushback for saying, "We're five days away from fundamentally transforming the United States of America." That statement should have given even his most ardent supporters pause, but it didn't. It was in line with everything Obama had previously said, and it was what his supporters wanted to hear.

2016: What rules?

Fast forward to 2016, and Donald Trump didn't just ignore traditional norms, he almost seemed to relish violating them. Who would have ever dreamed we'd elect a man who talked openly about grabbing women by the **** and who was constantly blasting out crazy-sounding Tweets? But Trump did get elected. Why? Some people believe it was because Americans finally felt like they had permission to show their bigotry. Others think Obama had pushed things so far to the left that right-wing voters were more interested in dragging public policy back toward the middle than in what Trump was Tweeting.

Another theory is that Trump's lewd, crude, and socially unacceptable behavior was deliberately designed to make Democrats feel comfortable campaigning on policies that were far further to the left than they ever would have attempted before. Why? Because they were sure America would never elect someone who acted like Trump. If that theory is right, and Democrats took the bait, Trump's "digital policies" served him well.

And although Trump's brash style drew the most handlines, he wasn't the only one who seemed to have forgotten the, "Don't do or say anything stupid," rule. Hillary Clinton also made news when she made a "basket of deplorables" comment at a private fundraiser, but it leaked out, and it dogged her for the rest of the election cycle.

And that's where we need to start our discussion. Now that all the old rules about candidate behavior have been blown away, do presidential candidates even need digital policies?

Yes, they do. More than ever, in my opinion. Let me tell you why.

Digital policies for 2020 and beyond

While the 2016 election tossed traditional rules about political campaigns to the trash heap, that doesn't mean you can do anything you want. Even if it's just for the sake of consistency, candidates need digital policies for their own campaigns, regardless of what anybody else is doing. Here are some important things to consider.

Align your digital policies with your campaign strategy

Aside from all the accompanying bells and whistles, why do you want to be president? What ideological beliefs are driving you? If you were to become president, what would you want your legacy to be? Once you've answered those questions honestly, you can develop your campaign strategy. Only then can you develop digital policies that are in alignment with the overall purpose -- the "Why?" -- of your campaign:

  • If part of your campaign strategy, for example, is to position yourself as someone who's above the fray of the nastiness of modern politics, then one of your digital policies should be that your campaign will never post or share anything that attacks another candidate on a personal level. Attacks will be targeted only at the policy level.
  • While it's not something I would recommend, if your campaign strategy is to depict the other side as "deplorables," then one of your digital policies should be to post and share every post, meme, image, etc. that supports your claim.
  • If a central piece of your platform is that detaining would-be refugees at the border is inhumane, then your digital policies should state that you will never say, post, or share anything that contradicts that belief, even if Trump plans to relocate some of them to your own city. Complaining that such a move would put too big a strain on local resources -- even if true -- would be making an argument for the other side. Don't do it.
  • Don't be too quick to share posts or Tweets from supporters. If it's a text post, read all of it to make sure there's not something in there that would reflect negatively on you. And examine images closely to make sure there's not a small detail that someone may notice.
  • Decide what your campaign's voice and tone will be. When you send out emails asking for donations, will you address the recipient as "friend" and stress the urgency of donating so you can continue to fight for them? Or will you personalize each email and use a more low-key, collaborative approach?

Those are just a few examples. The takeaway is that your online behavior should always support your campaign strategy. While you could probably get away with posting or sharing something that seems mean or "unpresidential," posting something that contradicts who you say you are could be deadly to your campaign. Trust me on this -- if there are inconsistencies, Twitter will find them and broadcast them to the world. And you'll have to waste valuable time, resources, and public trust to explain those inconsistencies away.

Remember that the most common-sense digital policies still apply

The 2016 election didn't abolish all of the rules. Some still apply and should definitely be included in your digital policies:

  1. Claim every domain you can think of that a supporter might type into a search engine. Jeb Bush not claiming www.jebbush.com (the official campaign domain was www.jeb2016.com) was a rookie mistake, and he deserved to have his supporters redirected to Trump's site.
  2. Choose your campaign's Twitter handle wisely. It should be obvious, not clever or cutesy. In addition, consider creating accounts with possible variations of the Twitter handle you chose so that no one else can use them.
  3. Give the same care to selecting hashtags. When considering a hashtag, conduct a search to understand its current use -- it might not be what you think! When making up new hashtags, try to avoid anything that could be hijacked for a different purpose -- one that might end up embarrassing you.
  4. Make sure that anyone authorized to Tweet, post, etc., on your behalf has a copy of your digital policies and understands the reasons behind them. (People are more likely to follow a rule if they understand why it's important.)
  5. Decide what you'll do if you make an online faux pas that starts a firestorm. What's your emergency plan?
  6. Consider sending an email to supporters who sign up on your website, thanking them for their support and suggesting ways (based on digital policies) they can help your messaging efforts. If you let them know how they can best help you, most should be happy to comply. It's a small ask that could prevent you from having to publicly disavow an ardent supporter.
  7. Make sure you're compliant with all applicable regulations: campaign finance, accessibility, privacy, etc. Adopt a double opt-in policy, so that users who sign up for your newsletter or email list through your website have to confirm by clicking on a link in an email. (And make sure your email template provides an easy way for people to unsubscribe.)
  8. Few people thought 2016 would end the way it did. And there's no way to predict quite yet what forces will shape the 2020 election. Careful tracking of your messaging (likes, shares, comments, etc.) will tell you if you're on track or if public opinion has shifted yet again. If so, your messaging needs to shift with it. Ideally, one person should be responsible for monitoring reaction to the campaign's messaging and for raising a red flag if reactions aren't what was expected.

Thankfully, the world hasn't completely lost its marbles

Whatever the outcome of the election may be, candidates now face a situation where long-standing rules of behavior no longer apply. You now have to make your own rules -- your own digital policies. You can't make assumptions about what the voting public will or won't accept. You can't assume that "They'll never vote for someone who acts like that"; neither can you assume, "Oh, I can get away with that, too." So do it right from the beginning. Because in this election, I predict that sound digital policies combined with authenticity will be your best friend.