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15 Signs You're Scaling Your Company Too Quickly

Forbes Coaches Council

Forbes Source:

When your company is in growth mode, you might feel empowered by the exciting changes you're bringing to your organization. You're hiring new people, launching new campaigns and building new partnerships -- you're on top of the world, and you feel like nothing can slow you down.

While it's good to be motivated when you're scaling up, there is such a thing as growing too quickly. When the adrenaline wears off, you might realize that you've hired or spent prematurely, leaving your business in a very difficult position.

To prevent your startup from suffering the ill effects of too much growth, Forbes Coaches Council members caution leaders to watch out for the following warning signs.

1. Growth Is Breaking The Foundation Of Your Business

Growth is a good thing, but not at the expense of your foundation breaking down. Can capital keep up with the growth? Are your people leading the change? Is the culture being sacrificed or transforming with the growth? Are your "base business" customers still happy? All of these questions are critical and serve as stop gates for your organization when scaling. - Rubi Ho, The Rubi Ho Group

2. You Don't Have The Right New Hire To New Business Ratio

If companies get funding, the first thing they do is to hire people to innovate. Investors care about you maintaining a responsible business no matter what size you are or what size you scale to. If you're hiring ahead of the work and the work doesn't come through, that's a problem. Your eye on operations and its relationship to new business is absolutely key to growing in a smart way. - Joanne Markow, GreenMason

3. You're Getting A Lot Of Complaints

A huge giveaway that you are scaling too fast is complaints from those you serve. Ensure you make it very easy for a customer to complain. If you are never made aware of mounting complaints, you may see the results reflected in diminishing revenues. So, listen to complaints from customers. They will guide you where you need to put your focus and where you need to fix underlying problems. - Tyron Giuliani, Selling Made Social

4. You're Dropping the Ball Where You Used to Perform Well

It isn't unusual for leadership teams to stumble in areas they had previously "mastered." Maintaining products, clients and services that served as the foundation for growth are often sacrificed to make space for future focus. A mindful organization will avoid this misstep by establishing strong operational rhythms and scorecards that they keep in front of employees at all levels of the company. - Tegan Trovato, Bright Arrow Coaching

5. You're Noticing Big Cash Flow Gaps

Having significant demand can also mean an increase in costs to meet that demand. If you can't fund the demand until invoices are paid, a cash gap will quickly emerge. This puts pressure on covering your own businesses expenses and can create reputational risk in the market. Fiercely manage your cash flow. If you can't fund it, don't do it until you have identified the solutions to fill the gaps. - India Martin, Leadership For Life

6. You and Your Staff Can't Keep Up

A sign that your company is scaling too fast is that you and your staff are spread thin. This can manifest in poor customer service, tasks falling through the cracks from a lack of follow-up, slow product or service delivery, and not having time to train or implement systems. A solution is pulling back on marketing and sales temporarily to get a handle on the current volume and problem areas. - Tamiko Cuellar, Pursue Your Purpose LLC

7. Your Staff Members Are Becoming Workaholics

If an entrepreneur or CEO is scaling their company too quickly, stress, workaholism and poor performance will set in. This is a sign that the process needs to be slowed down, and more thought, time, patience and cultivation of company culture will be required to be truly successful. When a company scales too quickly, workers may start cutting corners to meet demands, which can result in disaster. - Kiran Gaind, The Connected Family

8. You're No Longer Delivering Value

When a company scales too quickly and doesn't have the structure to support the growth, failure rates will increase. If you fail to deliver value, you'll lose wallet share. As you lose wallet share, your failure rate will increase as you struggle. To ensure you don't become obsolete, focus on your core deliverables first. When you have those items fully upright, then press into growth activities. - Jeanna McGinnis, ReResumeMe®

9. You're Not Living Out Your Core Values

Sometimes we are so focused on the bottom line and expansion that we lose sight of purpose and quality of life. If we are not living our core values and from a place of integrity it could be that we've lost sight of our purpose. The antidote? Revisit core values. Get feedback from a trusted friend, coach or mentor. Review, reset and replan. - Frances McIntosh, Intentional Coaching LLC

10. You Don't Have A Plan In Place To Support Future Growth

No CEO thinks growing too fast is a problem. The only time rapid growth becomes a problem is when they don’t have a clear strategic vision or plan to support their growth. If you’re in the midst of rapid growth, just make sure you know where you’re headed, a plan to get you there and the resources needed. - Zheila Pouraghabagher, Collaboration Business Consulting

11. You're Not Balancing The Five Core Dimensions Of Business

Premature scaling is the number one reason companies fail. Entrepreneurs can maximize their growth by keeping the five core dimensions of the business -- customers, products/services, team, financials, business model -- in balance. The secret of high growth entrepreneurship is to master the turmoil of getting each of these five dimensions to move in parallel performance with one another. - Shohreh Aftahi, ThriveVance, a business advisory group

12. You're Spending More Time On Operations Than Customers

To recognize premature scaling, review the notes from your last five leadership team meetings. If more time was spent on internal operations than on customers, your scale may be off. To correct an imbalance, shift focus to customers and minimize internal investments. Stay nimble while the market gets used to your product, pivot according to customer input, then scale for the customers who stick. - Kelly Byrnes, Voyage Consulting Group

13. You're Not Operating With Excellence In Your Current Business Stage

Any time we take on too many clients, the tendency is to simply hire more workers. It's a delicate balance and training new workers takes time. What I like to do is grow my businesses in steps. We take a big step, work up to the step, make sure the step is performing properly then we take another big step. Before we scale up, we always make sure we are operating with excellence with what we have. - Ryan Stewman, Hardcore Closer LLC

14. Your People Can't Absorb Any More Change

Scale and growth are positive indicators until the pace becomes overwhelming for the people. We humans don't have an infinite capacity for change. Think of people as sponges and change as the liquid flowing through them. When sponges get oversaturated with liquid, they can't absorb any more and begin to leak. Watch for the leaky sponges. Give them time to dry out before absorbing more. - Kathy Bernhard, KFB Leadership Solutions

15. Your Business Is No Longer Energizing You

On paper, it looks great when you've accelerated your revenue. But before you scale, tell the truth: Is your growth fun and energizing for you? Or does it feel like a guilty burden, like if you slow down you'll let others down? When you're in charge, don't get swayed by the glamour of growth. It may be more important for you to get your infrastructure in place or to build better leaders. - Darcy Eikenberg, Red Cape Revolution

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