If you’re starting a business, then growth is the aim. You have to expand your customer base from a tiny starting footprint of the curious, loyal friends and family to a sustainable crowd of loyal customers who are drawn in by your offer and stay because of the quality. From there, many businesses aim to grow more, increasing revenue and profits, opening more locations, perhaps expanding into new countries and becoming a global brand.
But is that the right path for everyone? Is there such a thing as bad growth? Today we’re taking a look at these questions for the good of your business growth strategy. Before you start calling boutique consulting firms, it’s worth taking a look at some of the issues.
Growing Too Fast
Fast growth can be great news for a business – but it can also be very damaging. Growth has got to be planned for and accommodated by growing different areas of your proportionately. For example, a huge growth in orders from a new marketing campaign is great news: lots more revenue, new customers and a big growth in the visibility of your brand. But if this takes you over your capacity to fill those orders, you’re going to disappoint your customers.
You need to know what your capacity is, how much your logistics side can handle and ensure you’re ready to step up if necessary. Failing to fill those orders or compromising on the promised quality can really hurt your reputation and turn an opportunity into damage.
The Wrong Business Model
Different kinds and phases of growth go with different business models – start-up businesses rely on multiple large funding rounds and sudden explosions of growth as your product is seized by the masses. If you want to run a start-up, then that’s ideal, but if you’re running a local retail business, you’re looking for a slower and steadier model of growth – if you’re seeing start-up style booms and busts then something’s wrong with how you’re growing your business.
There are lots of ways to try and grow your business – entering new markets, opening new branches, adding new products to your inventory – but the key thing is that you have to get it right. Any growth project is, by its nature, public and a public failure can do enormous harm to your brand. New Coke was an attempt by The Coca-Cola Company to grow its brand that crashed, burned, and did enormous harm in the process.
Growth projects need to be researched and planned carefully – this gives them the maximum chance of success and strengthening the brand, rather than doing it damage and costing you money.