Grow Slowly

Question: 

I started a web design company last year and it’s going great, I have more work than I know what to do with, actually. My problem is that I have been asked to do a site that is much bigger than anything I have done before and it will take all of my time — for awhile. Should I outsource my current stuff, juggle better, or what? —- Alicia

Answer: 

In the life of any small business, there hopefully comes a time when an opportunity arises that can allow you to take a quantum business leap. Maybe it is a contract with a big company, or a great distribution deal, or a competitor goes out of business. Whatever the case, when it happens, if it happens, we are all inclined to say yes and reap the rewards.

But know this: There are downsides to growing too fast. You’d better be aware of the risks.

Some readers of my column may be aware that when I was growing up, my dad owned a few carpet stores. He and his partner started small, and my dad was really happy at the beginning – strategizing, selling, and planning -– all things entrepreneurial. Things grew slowly and surely until they reached the tipping point and all of a sudden, business just took off. My dad and his partner were opening a new store every year.

Sounds great, right? Wrong. The bigger the chain of stores grew, the more unhappy my dad became. Suddenly, instead of being a crafty entrepreneur, he found himself being a boring middle manager. Finally, after growing the business to 16 or so stores, dad sold out to his partner and started over with one huge carpet warehouse. He never grew it past that one store again, and that was the happiest I ever saw him in business.

You have to really think hard and be ready when the moment of growth comes along because the changes that will be wrought upon your business will be profound. If you are not ready, you could end up miserable like my dad, out of business, being sued, or facing bankruptcy.

I remember a client who owned a restaurant, and we worked up a great PR campaign. The local paper wrote a glowing story about the business in the Friday paper. The only problem was that my client was not ready for the avalanche of new business that hit that weekend: She didn’t have procedures in place to deal with so many people, nor did she order enough food. That weekend, instead of finding a great restaurant, potential new customers found a place overwhelmed and out of food. She never did have a second chance to make a great first impression. She blew it.

Those high-flying Internet start-ups back at the turn of the century learned this lesson the hard way. Rapid growth, especially for a new business, too often leads to rapid problems because the company is neither established nor experienced enough to handle all of the issues that accompany big deals: increased labor demands, extra capital requirements, the need to allocate resources better, and so on.

Yes, I know it is hard to say no, and we never know when that great opportunity will arise. The savvy entrepreneur knows their limits and doesn’t bite off more than they can chew. Great entrepreneurs know that a big deal can be an equally big mistake if they can’t handle the extra pressure and requirements.

So I say, grow, but grow slowly. Create some institutional knowledge and skill, so that when the time comes to take it to the next level, you are ready.

If it is a natural next step, go for it. But if it feels more like an unnatural stretch, you better think twice.

Written by Steve Strauss

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