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Grow Fast or Slow To Live Long?

The successful startup organization is often soon faced with this dilemma.  The business is growing rapidly, new customers are coming on board and you have decisions to make.

Do you move to a bigger location?  Do you hirer more staff?  If you’re very small, do you higher an assistant?  Do you seek a loan from the SBA?  Do you seek venture capital to grow your business?  Or is it still just time to sit still and wait?

Grow the Space?

Is your current location beneficial to your business?  Is it the right size?  To know this you have to know where you’re going and what you’re customers are looking for.  If you’re successful, you probably already know what your customers are looking for - at least what they’re looking for right now.  But do you know what your customers’ needs will be in the next 3-5 years?  You grow, they grow.

Let’s say you’re an IT shop and you offer PC technicians on demand, network setup, etc.  If you’re growing and your customers are growing, is that still going to be your primary offering 3-5 years from now?  Not likely.  You may be doing server installation and setup for larger organizations or possibly outsourcing technical support personnel inside other organizations across the country.

There are a lot of possibilities, all of which will affect your location of choice and the size of your office space.  The key is to not be short sited in your choices, but also to keep a good balance between what you can afford now and what you think (conservatively…not over the top) you can afford in the future.

Grow the Staff?

This one is a little easier, possibly.  Mapping out where you’re going with your business gives you an idea of the type of resources you may need to add in order to be successful and to service your growing customer base.

In the example above, acquiring experienced technicians is a given.  However, you may also want to consider technicians who will be ok with travel if your 3-5 year planning window includes outsourcing technicians and performing Managed Services work or Professional Services work for organizations in other locations around the country.

Skilled staff cost money…which brings us to our next question…

Seek Outside Dollars?

You’re growing, but to get to the next phase may require an injection of money.  I worked at one organization as a consultant and we were doing great.  I rescued three failed implementations for them and they were quickly becoming successful and lauded my efforts for them.  And then they had to end our relationship!  There reasoning behind this decision is that it made the difference, on paper, as to whether they were showing a profit or a loss and they were working with a venture capitalist on acquiring a significant amount of cash for growing the company.  They needed to look profitable when the VC brought in the auditors.

You have to think these things through…VC, SBA loan, another type of loan, etc.  Eventually this organization actually decided against going the VC route because they were going to be required to relinquish too much control of the company and it’s direction.  It was a wise move for them.  But will it be a wise move for you?  That’s a question only you can answer.

Maintain the Status Quo?

Another option that is always there is to do nothing.  And that is ok, too.  Growth can happen slowly and still be a great thing.  Hundreds…thousands of businesses have appeared to be successful and then failed fast because they tried to grow too quickly.

I nearly witnessed that happen to a friends construction/demolition company.  He was taking on new work too quickly and needed to clone himself.  Since that’s not possible, he started hiring friends as additional staff.  I stayed away and just ‘advised’ him and that worked out well and we’re still friends.  The end result was he realized he was growing too fast and some of those friends had to be cut loose and yes…that is pretty hard on friendships when they left other jobs to come work for him.  It was hard on friendships, but he’s still in business, at least.

Summary

In the end, the small business owner can only make all of these decisions.  The best course of action is to have a plan.  The old saying “failing to plan is planning to fail” is so incredibly true.  Map out a plan and then monitor it against your organization’s progress.  The plan can change, but managing it closely will ensure you’re aware and that you’ll never drift too far off course.  Grow at the right pace for your organization and your customers.

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