Growing Faster Than You Planned? 5 Dangers to Know About

There’s no right or wrong pace for a business to grow. In fact, the best pace for your business to grow depends on where your business is at in regards to life cycle, risk tolerance, and available resources. If there’s a hot market in your industry, you’ll obviously want to capitalize with fast growth. Or if you’re running a start-up that needs to finance its own growth from profits, a slow approach is ideal.

As a business owner, the idea of fast growth likely sounds ideal, but growing too fast can be quite problematic. Keep reading to learn about the top 5 dangers to know about when it comes to a fast-growing company.

1. Inability to Manage Finances

With a smaller business, it’s much easier to maintain command and control of the numbers. You’re able to keep close eye on your cash and you can see just how fast expenses are comparing to sales. But, if your business is growing too quickly, managing finances and balancing the budget can become unruly.

Losing control of your finances is dangerous. At every point in the business cycle you need to have a clear understanding of cash flow. Otherwise you could make a mistake that has a lasting and detrimental impact.

If your business starts to grow too quickly and you’re losing control of finances, it may be ideal to consult with professional employer organizations in New York. PEOs can take charge of your company’s finances along with other business factors like marketing and HR.

2. Overvaluing Sales

Sales are an important financial factor when looking at the health of your company. Many business owners assume that if sales are on the up-and-up that everything else will fall into place. But, an increase in sales doesn’t always mean that your company is making more profit. Even if sales are growing, you may not be making enough to cover expenses which leave, you in the negative. This is especially true for smaller and newer businesses.

When your business is growing too quickly, it’s easy to lose focus of other important values. Instead of just focusing on sales, it’s important to look at other numbers, especially revenue. By taking a holistic view of your financial data, you can make more informed decisions.

3. Poor Business Operations

As your company grows, it’s even more important to be organized. When you first started your company, you were likely able to get by just fine with a small team of experts. But as your business grows, you’ll need teams of people to ensure you’re staying on the right path and can account for all of the necessary daily business activities.

As business operations slip, you’re more likely to make poor decisions that can have a lasting impact. Companies that are growing quickly need to ensure that they’re as organized as possible. Important information like cash flow, cost estimates, sales, budgets, and inventory need to be accessible and you need to have the right team on board.

4. Impacted Customer Service

As your company is growing at a fast pace, you need your sales team to be functioning at its best. At the same time, you also need to ensure that your customers are happy, which means that your customer service representatives also need to be on their best game. When sales are booming, it’s easy to lose sight of your customers. But, a quickly growing business is also likely to experience an increased demand for customer service.

Never take the risk of putting customer service on the back burner. One study found that companies lose more than $62 billion a year because of poor customer service. Businesses of all sizes need to have a solid reputation in order to succeed in their industry. Personalized and quality customer service can turn customers into brand ambassadors and advocates.

When growth is exceeding expectations, ensure you continue to live up to your stellar reputation.

5. Hiring Low Quality People

A quickly growing company has a lot of moving parts. In order to keep up with the fast pace, it’s not uncommon for companies to go on a hiring surge in order to bring more hands on deck to navigate the ship. However, when companies hire quickly, quantity tends to surpass quality. Hiring the wrong people can be detrimental to your company, both financially and culturally. The cost of replacing a bad employee is estimated to cost around a fifth of their salary.

When your company is in growth mode, it’s only obvious that you’ll want to grow its staff. But before hiring new employees, take the time to ensure that you’re hiring people who not only fill your needs but also bring experience and knowledge to the table. Otherwise you risk a slew of HR problems, low productivity, and possibly impacted morale.


Building a business is a tough job. After months or even years of hard work, it’s nice to finally see your business growing. But, growing too fast can be just as dangerous as not growing at all. Keep these five dangers in mind when it comes time to assess the health and rate of your business’ growth.

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