6 Things to Watch Out for When Building a Fast-Growing Company
As an entrepreneur, it’s exciting when things take off for your company.
Watching things move fast can be thrilling — and it feels good to be successful.
However, there are some definite challenges that come when you have a fast-growing company. Staying on top of everything can be difficult, and you can hit some snags in the road.
As you move forward, it’s important that you are aware of the challenges ahead of time, so that you can meet them practically and get through the growing pains without losing your sanity or tanking your business.
Too Much Success Too Fast Can Cause Problems
When you’re a fast-growing company, you can run into problems. At first, it seems perfect. You’re growing faster than you expected. You’re not sure why you’re growing so fast, but it’s perfect. You’re rocking it.
However, with fast growth comes other problems. You might not be able to keep up with demand. Maybe you have too much going on and not enough employees to do all the things you need to do.
What happens if you need to keep up with growth, but you don’t quite the capital to cover all the costs?
There’s a lot to contend with. You might not have policies in place to deal with some of your social media needs. Maybe you miss some things. Perhaps you get burned out and cut some corners.
At some point, the growth becomes more than you can handle, mistakes are made, and then you can get in trouble on social media and in other places. Suddenly, your business is on the verge of collapse as you wrestle with the issues.
If you are a fast-growing company, here’s what you need to know about some of the challenges you are likely to face:
1. It’s Tempting to Spend
As you see growth and success and income, it’s tempting to spend — and spend a lot. You might want to upgrade to a new office space that’s trendy.
Maybe you want to provide a bunch of perks for your employees. There’s nothing with rewarding your employees and providing them with rewards and sharing the fruits of all your labor. However, you do need to be careful. Is pet insurance really necessary? Do you need to have a fancy campus with a gourmet cafeteria?
Carefully think about what you actually need to spend on. What purchases will benefit the business most? Even if you don’t have a fancy company car, you can still be successful. In fact, you’re more likely to be successful when you focus on the essentials and tone down the flash.
2. Cash May Not Be Keeping Up with Growth
Perhaps you are a fast-growing company, but you aren’t seeing all the income quite yet. Maybe buyers are slow to pay, or you’re waiting on a transaction to go through.
There are many cases when quick growth means that you order things now, and hope that the cash flow works out so you can pay the bills when they come due. But that’s not always what happens. Sometimes you get ahead of yourself. You spend on credit, and the income is slower in coming.
Striking a balance in this situation can be difficult. You may need to re-evaluate some of your spending and stick with the shoestring budget. You might also need to slow down until you get the promised cash.
In some cases, it can make sense to get a small business loan or some other infusion of cash to meet your obligations while still meeting the demands of growth. Try to find ways to raise money, from asking for payment in advance when practical to running a crowdfunding campaign to get the funds.
3. Are You Ready for Investors?
One way to get the cash you need as a fast-growing company is to get help from investors.
Many entrepreneurs and business founders hope for venture capital. The dream of a large infusion of cash to make most of your problems go away is tempting. However, once you start taking other people’s money, they become more interested in what you’re doing.
You might need to give up some of the control of your business to VCs who want a say in how you achieve results.
Angel investors are generally a little more hands-off in their approach, and that can be attractive as well. However, even an angel investor will eventually expect to see some solid results.
Before you take investor money, think of your options. Look into crowdfunding investing, which can be a little less demanding. And think about how much control you are willing to give up. If you can handle letting someone else in on the decision making, getting investor funding might not be a bad plan.
Brace yourself, though, and make sure it’s what you really want before you move forward.
4. Do You Have the Right Team?
One of the biggest challenges faced by fast-growing companies is that of making sure the team is adequate to the job.
First of all, once you start growing quickly, you know you need to hire more people to fill the positions. You need people to help you keep up. The next challenge is making sure you have the right people. You might be in such a hurry to make your hires that you don’t vet your potential team members thoroughly.
Even though it’s tempting to hire someone quickly (or lots of someones), resist the urge. Instead, take the time to think about the kind of person you want in the job. Make sure you take the time to hire someone who fits the bill, and your company culture.
Don’t just hire to hire. Make sure it’s a good fit. You don’t want to have to keep training and replacing your people.
5. Developing Company Culture
In a fast-growing company, the culture can get away from you quickly. Before you know it, you’re embroiled in a sexual harassment scandal or a video about your defective product is going viral.
Take the time to think about the kind of culture you want to encourage in your company. Set the example, and model good behavior. Make your company the kind of place you want it to be. As you work on your company culture from the ground up, and pay attention to the kind of people you hire, you can avoid some of the problems that have the potential to plague you down the road.
6. Don’t Rest on Your Laurels
As you see success and start to see good results, you might be tempted to sit back a little bit. Maybe you slack off a little. Maybe you treat yourself while the rest of your startup team works for peanuts.
You need to check yourself.
Now is not the time to check out. While you want to enjoy the perks of being the boss, it’s important to still stay in touch with your employees. Be ready to get in there with them. Be accessible.
And make sure you’re preparing for the next thing. You might be growing fast right now, but markets change, and in today’s world change comes fast. You have to be paying attention and ready to work on what’s next if you want to avoid becoming obsolete.