4 Ways Rapid Growth Can Harm Your Small Business

While most business owners would love to have exponential growth right out of the gate, there are times when slow and steady win the race.

When it comes to owning a small business, the first challenge you might face is simply getting your company off the ground. And with nearly half of all small businesses failing within the first two years, it can be a daunting task. However, once you get past the initial stages and start to taste success, it can be enticing to go for broke and try to expand as rapidly as possible.

Unfortunately, this is not always the best way to grow a business.

Instead, you should consider taking a slow and steady approach to any growth initiative. Here are four ways rapid business growth can harm a company:.

1. Your Customer Service Could Falter. If revenues are excellent and the outlook appears too rosy, you may want to speed up the expansion of your business. However, you must first gauge whether your current staff can keep up with the increased business. Chances are that great customer service helped get your business to its current level of success, so impacting the level of service your customers get might have adverse affects. If your staff members can’t keep up with increased business, where will you be? You might have a business that doesn’t meet your customers’ needs, and some may look to your competition.

2. Your Cash Flow Could Be Affected. A positive cash flow can be a key to the long-term success of any small business. However, expand your business too rapidly, too soon, and you might be in the position of not being able to pay your monthly bills. Even if you don’t face a worst-case scenario of bankruptcy, you may do a great deal of damage to your reputation within your industry.

3. You May Lose Sight of Your Original Goals. Experiencing success is exciting, but it should never cause you to alter your original goals. While undergoing any form of expansion, consistently refer to your original goals and make sure any strategies for growth are in line with what you wanted to accomplish at the outset.

4. Employee Turnover Could Increase. Turnover costs can be the death knell of a small business, especially in the beginning. Expand too fast, and you run the risk of frustrating and alienating your staff, which could cause them to resign. Once they leave, you’ll have to endure the significant cost of training new staff members, many of who may not fit the company as well as your previous employees. Keep your staff in the loop regarding all expansion plans, and always keep their interests and feedback in mind.

I believe the equation for small business success is simple: hard work + managing costs + adeptly implementing growth = long-term success. It’s that simple.
Will Erikson, writes about small business growth, credit and debt topics, and tips for improving marketing.

I believe the equation for small business success is simple: hard work + managing costs + adeptly implementing growth = long-term success. It’s that simple. If you’re lucky enough to experience success early on, consider rewarding yourself and expanding modestly – but don’t go overboard. I was fortunate enough to experience success fairly early on in my endeavor, but one of the best moves I ever made was to expand at a pace that my company could handle. Do yourself a favor and consider adopting the same strategy – you won’t be sorry.


What are your plans to help expand your small business and do you feel confident that your business is ready for expansion? If your company is business-to-business and you know you’re ready to take on new contracts, learn more about how your business credit file can help you land contracts.