Can growth be bad? Well, considering all the importance placed on margins, ROI, increased sales figures, etc. it may seem like growth is the only thing businesses should be striving for. After all, from the time an organization open its doors, growth is the goal. As a business makes its way towards that dream of the break-even figure that every start-up longs to achieve, discussions about growth are always first and foremost. However, after your company has crossed that initial stage of growth, what’s next? This is a vital question to consider. In fact, companies who ignore this question and are unable to keep pace with their own growth may ultimately end up imploding.

The Risks

A cash crunch is the first bump in the road for many fast growing companies. Often, businesses spend money on upgrading their infrastructure or operations when they should be financing their growing sales. A company that grows too fast may not have the budget to maintain the number of sales and level of service expected of them. This is just one example of rapid growth hindering the long term sustainability of an organization.

Even a corporate biggie like McDonald’s gets it wrong sometimes. For years, they depended solely on their sales figures and ignored the warnings of market analysts, who repeatedly stressed things like market saturation and declining profits. In 2003, they admitted that they were no longer a growing stock after years of failing to heed the warning signs.

Moreover, rapid growth also means rising expectations of customers. In any business, not being able to fulfill a loyal customer’s expectations is one of the biggest failures. Once a business gets the reputation of failing the customer, it is almost impossible to […]