How Growing Too Fast Can Hurt Your Business

03/31/17  |  Rebecca Perez  |  1035 views

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When you've got a company in a start up phase (anything under 3 years), there's still a very high potential to grow quickly because there's less "risk" involved. Your account receivables are high, working capital is low and (hopefully) cash flow is healthy. 

I'm in this constant dilemma with my company where I'm thinking: should I take this to the next level or should I grow slowly and steadily instead? After speaking with my mentors, business coaches, and reading countless books on the topic I came up with a measurable answer on how you can maintain the growth of your company and stay consistent while doing it:

1. Learn to delegate responsibilities 

Let me give you an example. Sophia Amoruso founded Nasty Gal, an american retailer in 2006. The company started as an eBay store and then opened its official platform shortly after. Every year brought them one step ahead; from opening a HQ office in Los Angeles, to opening a warehouse, to opening its own label company, to gaining the title of "Fastest Growing Retailer" to filing for Bankruptcy in 2016. 

I find this case completely mind blowing because it doesn't make sense: how could Nasty Gal go under when they had the trendiest, most affordable online platform? They had created a movement, grown a following, had over $250 million dollars in sales. Everything was there to succeed except one problem: The Founder was also the CEO. Amoruso had a problem delegating top responsibilities. She only got CEO Sheree Waterson on board in January 2015, and it was already too late. 

There's nothing wrong with being a visionary, with having future plans for your business. With seeing your company in 10,15,20 years from now. But don't try to pile up 10 years of work and growth into 2 because it'll bring you more disposable income. Infiltrating any market takes time. To become  a master at anything you need to put in 10,000 hours minimum. That's around 5 years in an average work week. If your company's been on the market for less than 2 years, you have no experience running an actual corporation. 

2. Be Patient

Things take time. Look at what Steve Jobs did to Apple. He founded the company in 1976, had many ups and downs but finally triumphed (40 years later) bringing the revenue to $233 billion dollars last year. 

3. Focus on one thing at a time

If you look at top producers in the world, Steve Jobs, Michael Jordan, Michael Phelps, Bill Gates, Warren Buffett - what do these guys have in common? They live their craft day in and day out. They've got over 20,000 hours under their belts. They have mastered the game and that's how they stay on top. 

4. Quality is more important than quantity

Some companies lose out on quality because they are trying to produce more than they can handle. This is when the "NO" guy comes in. Build a habit of saying NO to projects or collaborations that are not worth your time. You cannot say yes to everything. It's better to have 2-3 projects that are running smoothly and delivers 100% than having 5-6 with a 75-80% return rate. Your reputation is on the line every single time. 1 bad review can hurt your business more than you know.

5. Be the BEST at what you do

Repetition is the mother of skills. Keep doing that you love, work at your craft day in and day out, become the expert in your field. Develop strong sensory acuity. It's not a race to the finish line, you're on your way.

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