Every business owner is aware of how important it is to grow their business. After all, if a business isn’t growing, then it’s pretty much inevitable that it’ll fall behind the competition. But there’s one mistake that far too many business owners make. They try to push their business to grow too hard. It’s understandable that they might try to do this, but it can actually be pretty dangerous to your business as a whole. If your business is growing too fast, then it runs the risk of collapsing under its own weight, and when that happens, it can be extremely difficult to fix it. With that in mind, here are a few signs that your business is growing in an unsustainable way.
You’re in an office space that’s too big
If you’re pushing your business to grow, it’s tempting to move it into a larger office space. Part of the reason behind this is the assumption that, as you grow, you’re inevitably going to need more employees and more space. The other temptation that leads a lot of business owners to do this is that they don’t want to be seen as amateurish in any way. There’s a, rather foolish, assumption that a lot of people make that just because a business is small or run from someone’s home, that it’s automatically inferior to a larger company. In fact, you’re often much better off keeping the scale of your business down and using that to increase its focus in more productive ways. If you’re finding yourself in an office space that you simply don’t need, it might be time to get the movers back in, pack up the equipment and downsize significantly. You’ll be much better off with a workforce and environment that fits the level that your business is currently at.
It can’t handle the pressure from investors
A bigger business comes with larger expectations and the heaviest of those invariably come from investors. You may find that you need larger sums of money to expand your business. This might be because you want to reach more international customers or because you want to increase the speed at which your product is made and released. In order to cover those costs then you’re going to have to court investors. Investors aren’t in the business of handing out money for nothing, and they often expect a pretty hefty return. If your business isn’t ready to handle those expectations, then it’s a sign they shouldn’t be out looking for that extra investment in the first place.
Expenses outweigh everything else
It hardly takes a genius to say that if you have more money going out than coming in, you’re in trouble. Rapid expansion is one of the most common reasons behind cashflow problems in a lot of businesses. This is because as the business grows, so do its expenses. If you’re growing in a sustainable way, then your revenue will increase to match those expenses, but if you’re pushing your business too hard, then you’re going to find that it’s practically hemorrhaging money in an attempt to keep up with it’s ever increasing expenses.