Every business dreams of that special moment. The time where all your endless hard work, efforts and struggles pay off. After finally settling on that idea, pitching to the right investors, and designing the product you always wanted, everything just starts happening for you. Your sales are up, profits are coming and customers are growing more than usual. This might feel like the perfect time for growing your business.
The scaling up phase is always an exciting time for any business be it small or big. Many international and China B2B trade sites experience the transition where instead of steady growth, they start making plans for rapid evolution. This strategy, however, can be disastrous in a number of ways. Businesses don’t realize the dark sides of growing too fast and that may cause a problem for them. Read on below to find some of the downsides you need to be careful of:
1. You might get into a Financial Crisis
In spite of the overwhelming growth, your business, when growing too fast can get into a financial crisis. The costs will get difficult to manage and result in a cash outlay. This is because when you will start growing at an unexpected pace, your planned monthly expenses will exceed, mounting your revenues and use of resources. Most businesses in the China B2B Marketplace face such conditions where they get increasingly high customer demand causing it difficult for them to cater to each of the needs at a stable incoming profit. If unfortunately, your business experiences a delay in receiving collections, you can be in serious trouble as the regular cash flow may be interrupted too.
2. Business Operations become Ineffective
The key trick behind the success of large business companies is being organized. For start-ups, there is usually a small working team and working ineffectively or loose may not be much of a problem. However, when it comes to expanding, you have to be more thoughtful and organized while working strictly on your planned business strategy. This is why rapid growth can bring more disorientation among the staff, business policies, cost estimates, budgets and your inventory system.
3. Your Working Staff is overworked
Rapid growth may bring along long working hours, extra burden and workload on your employees. To ensure your employees produce the best of their potential, they need not be physically and emotionally drained out, which your business might just be doing that to them. As a result, you will be on the risk of losing your most trusted employees casing more loss to the business overall.
4. You might not be able to handle a lot of Pressure
Work pressure brings the worst out of you. Most businesses seen in the China B2B platform when climbing up that success ladder failed because they weren’t able to absorb the immense pressure and start to lose their potential. Hence, they deliver services way below their customers’ expectations creating disappointments and frustration for themselves. The pressure from increasing demand can do the same to your business if you plan on rapid and unplanned growth.
5. You start hiring the Wrong People
With accumulating demands, more work will stack up your to-do lists making it difficult for your small workforce to fulfill all of it. In this situation, when you’ll start to hire more people, you’ll most probably end up compromising on good talent since you have to fulfill the needs as quickly as possible. You will keep hiring the wrong people or the ones with basic skills because you will be rushing to cater to your outgrowing work deadlines.
6. Your Customer Service May go out of Hand
Just as you need people to boost your marketing and sales team, you will also need staff to keep up with the same level of customer service as your business nurtures. A hasty growth will make it harder for you to live up to customer expectations compiling more negative feedback since you will always be in the need to fulfil your orders instead of fulfilling them to the required standards.
Business growth is important but what’s more important is that you manage it well all along. If you don’t handle things the right way, such growth can not just be dangerous but also leave you right back to square one. Therefore, growing your business should be a steady process with fewer risks. earnings calendar