Business Growth is Good; And, Done Wrong, it Can Ruin You
When it comes to your investment business, growth is a good thing. A great thing, in fact. And though you might happily envision a meteoric rise to the top, you’re best off if your growth rate is slow and steady. Growth without discipline and management can actually undo any headway you may have made.
Here are some of the risks you face from growing too fast:
After investing so much time, energy and sweat into your business, when the first serious cash rolls in, you may be tempted to pour it into the things that you always dreamed of having when you were back at square one: a nice office space, a great suit, or perhaps a new car. While rewarding yourself a little is fine, you have to be very wise with what you do with your new flow of capital. Focus on your needs rather than your wants, and invest the cash in the places where your business can most use it, such as diversifying your investments, hiring an assistant, hiring a property management company, or setting extra money aside for unexpected repairs or vacancies.
Lack of Manpower
If you find yourself flooded with new business, you may also find that there suddenly isn’t enough of you to go around. After all, you can only be in one place at one time. You may not yet have the capital or time to hire help immediately, and then you will be stuck going it alone. You could end up underserving your clients and undoing the hard work that got you ahead.
Lack of Time and Resources
There’s only one of you, and there are only 24 hours in a day. There’s also only so much your current system can handle as it stands right now.
Imagine that small-town bakery makes a cake that catches the attention of a famous food critic, who mentions it in an article. The bakery suddenly gets bombarded with thousands of orders, but the owners lack the equipment and time it takes to fulfill them. They borrow money to pay for products, borrow equipment and work around the clock to get the orders out, but in the rush, they are unable to properly control the quality of the products.
With no one taking care of their usual orders, they lose regular customers, who feel underserved. The bakers get paid, but after paying back the loans, losing time, and losing customers, they are lucky if they break even. What’s more, their new customers are unimpressed with the uneven quality, and many of them don’t return.
The moral to the story? Always opt for quality over quantity, keep your eyes on your long term goals rather than the short term payoff, and focus on your needs – your wants will come later, when your success is solid, stable and properly supported by the wise choices you’re making today.