Many entrepreneurs and small businesses start off with a great and marketable idea, and soon find themselves with a lot of cash and a rapidly expanding customer base. What many of these successful people are unprepared for is the reality of success and growth. These are often the times when a successful business can go south because of an ill-prepared or unknowledgeable owner.
The first problem with growth is keeping up with the demands and expectations of the customer. They are the reason for the success, and their personal advertising to friends and family are often the key to continued growth. This means that any changes requested or suggested by the current customer base needs to be seriously considered and incorporated into the product or service. This can take time and cost money, but success has its own problems too.
Another problem for the growing business is hiring the right people. Expansion almost always means new hires, and the quality of this group will largely determine if the company con continue to produce the same quality of service or product as it has from the beginning. One example of this is software and customer service. A developer may know the ins and outs of the app, but selling the app is only the first step. Expansion will inevitably bring out problems with the app, and the first line of defense in dealing with glitches is the customer service or technical support group. Bad support can easily translate into a failed product.
For brick and mortar operations, particularly in manufacturing, business growth means plant expansion. This is not only an issue of having an available line of credit for expansion, but also finding the right location for the new plant. It needs to be in an area where there are enough people with the right skill sets to be able to manufacture the product. At the same time, it needs to be in an economically suitable area where the expected wages are in line with what the business is able to pay. Other potential issues are availability of raw material, transportation routes, and the general economic climate of the area.
In all of these areas, expansion requires planning for the future rather than simply keeping up with existing customer supply and demand. Many business plan for success, as they should, but when success comes there is no blueprint for the future. But planning too far ahead too soon can cause the owner to lose focus. One of the most important keys to business growth is managing that growth. Gradual and controlled growth is far superior than explosive, unexpected growth, despite what the bank account says. Growth can be both good and bad, and the result is dependent on the knowledge and flexibility of the business owner.