Can growth have devastating impacts on your business?

Everything and everyone from random business advice articles on the web to business mentors are constantly preaching the idea that if your business isn’t growing, it’s dying. That, however, is not always true, and at times, unsustainable growth itself could ruin your company. Based on and collected from actual studies, let’s now discuss why choosing to grow can sometimes turn out to be the worst decision for a business.

Smaller, Tightly Knit Businesses Recover Faster and Better

Consider your business to be a tree and just like a tree, the more branches it has and the longer they are, the harder it is for your business to resist a setback, or in the tree’s case, a storm.

Resilience is an extremely important trait of successful business operations in the long run, and a tightly knit, well-grounded business will always be able to come back faster and better from setbacks, losses, unexpected developments, etc.

A comparatively larger business, on the other hand, will have a lot more to manage, which inevitably will require more recovery time. The whole process of being resilient against setbacks slowly becomes a more trying ordeal each and every time, until that resilience breaks and the business has to downsize or liquidate.

Quality Over Quantity

The best things in the world are not mass-produced, they come in limited editions. Smaller teams with relative autonomy and flexible schedules work better and faster than haphazardly put together large teams who need to follow predefined schedules and targets.

You may lose your initial customer base when you grow larger and begin to accept larger orders because quality will almost inevitably suffer, whether it’s a service or a product that the business is offering.

Fast Expansions Make Everything More Complicated

Any expansion or growth in business will make the associated operations inevitably more complex, and unless you already have a stable ground and solid plan to accommodate those complexities, it may slow down productivity and crash your entire business along the way.

Any process that might have only been completed with a signature from the supervising manager before may require the same from multiple other department heads as well, which affects the pace of productivity. More and more big businesses are trying to streamline everything as best as they can, by following smaller business models.

Expansion and True Growth are Not One and the Same

It’s almost a trend now to believe in the idea that a larger business is less likely to fail, while in truth, larger businesses are usually the ones that fail most often!

Premature or mistimed growth is a ruinous proposition, which is more likely to run a business into the ground than staying stagnant. When it comes to long term durability, growth is not always the answer.

By now, it should be clear that improvement in existing areas of the business is far more important than expansion. Instead of growth for the sake of growth, the focus should be on making the business better at what it does. This is a strategy for the long term which will make the company’s foundations strong, the customer base happy, and will also make it possible for the company to grow sustainably, if and when the establishment is actually ready to take that step forward.

Leave a Reply