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As far as problems go, this one might sound like a great one, but rapid growth can actually be as disastrous as a business that never really takes off. In fact, the result is often the same: failure. Your services are considered so special that customers are crawling out of the woodwork to work with you. Nicely, of course. We all have those clients that we were thrilled to land in the early days. You may also consider looking into ways to improve your time management and the possibility of outsourcing some of your work.

Your business is growing so fast that you feel like you have to make quick, sometimes uninformed decisions about purchasing equipment or hiring employees. Anytime you have to make speedy, business-related decisions, ensure you do it with caution. Sustainable Solution: Negotiate a reprieve on the onslaught of work with some of your clients to give yourself the space to do some much-needed post-business planning. Do you find yourself spending significant portions of your time troubleshooting situations? The firefighting approach to getting work done is dangerous.

This could include IT solutions, customer management systems and upgrades to existing equipment. They require sober thought, research and execution because they have a lasting impact on your bottom line and the way your business operates.

The Challenges of Growing a Small Business Too Fast - Summit Financial Resources

Instead of shuffling people around and upgrading systems for temporary fixes, explore ways to optimize your processes to make them run smoother—both now and in the future. Your business may even be bringing in bigger and better profits than you ever imagined. How is this a problem, you ask? It becomes treacherous if not managed properly.

Here are the top six problems caused by rapid business growth and advice for how to handle them. The growth and expansion phase is an exciting time for any small business. The primary goal of a startup is to get customers, deliver the product or service and reach the break-even point as quickly as possible. According to the conventional business plans, once the break-even point is achieved, profitability should follow.

For some small businesses, however, another goal is rapid growth. And, that can be a problem. Businesses often underestimate the intense pressure that accompanies rapid business growth. The costs of running a fledgling business can be difficult to manage, especially coming on the heels of cash outlay to open the business. At this point, your business may be surviving on credit as you try to grow sales and revenues.

How To Know When Your Company Is Growing Too Fast

As you push for higher sales, expect monthly expenses to grow and possibly exceed your monthly revenues. If your collections are on track, that's not an insurmountable problem. However, a cycle or two of delayed collections could leave your business in that proverbial spot between a rock and hard place. To keep cash flowing anticipate the cash crunch with a realistic plan that accounts for delays in the collection of receivables.

Sales Have Ended

Prepare a back-up plan for raising cash from personal sources or through a pre-approved line of credit from your bank. Diversify your client base if possible.

If you depend on one big client as a revenue source, you are leaving your small business vulnerable to the whims of the client. When your business starts growing quickly, you will be forced to improvise to manage increased demand for your products or services. When business buildup happens too fast and too soon, you will not be able to adhere to your perfect business plan where your operational processes flow smoothly.

You may be pressured to hire more people sooner than you anticipated, and you may not be skilled in choosing the right people or you may not have the time to redesign your workflow to accommodate increased demand. While higher demand should lead to economies of scale, this may not happen if rapid growth results in any of these problems:. Manage the ordering system and the order fulfillment process so that you will not end up over-promising to your customers.

If possible, talk to owners of other fast growing businesses to see what problems they experienced and so you know what to plan for. Their services are free, and they may be able to help you be aware of problems and solutions for your type of business. Remember, too, it is better to turn down customers than risk annoying them if you can't deliver on time or can't deliver quality goods and services.

A few customer complaints occasionally are part of doing business, but when negative feedback starts to pile up, it is an indication that you are not meeting client expectations.

This could be due to lack of personnel to manage client interactions. It could also hint at other issues if your staff is spread too thin and is cutting corners to meet customer demand.


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Clients who provide positive feedback are bound to be repeat customers. A host of negative feedback could indicate that you are unable to cope with the market's expectations in terms of the delivery because you are overwhelmed. Make sure to monitor your feedback system regularly, keep an eye on social media mentions of your business, and have a plan in place for handling both positive and negative feedback.

A vibrant workplace inspires employees to work their hardest, but when work consumes most of their waking hours, you run the risk of losing your trained and trusted employees. You may find that your business is a revolving door of employees in spite of generous compensation and benefits.