Growth is bad!

Is it really?

I bet you don’t hear this often growth is bad. Even the last ten companies we’ve helped will agree. However, they will also tell you that once you get past the bad, the positive outcomes will be worth the effort. The question is, how do you traverse past the negatives and get to your sweet spot?

What Growth Means

All company owners aim for growth. They all want to be the next big name in the industry. Before they get there, of course, they must visualize their desired outcomes in detail. Steven Covey once said that we must “always begin with the end in mind.” So—what does your version of “growth” look like?

There are different ways to measure this. What’s important is for you to select one that will help you recognize growth when it’s already standing in front of you. Most companies start with their desired Key Performance Index (KPI), which defines tangible achievement. Then, they can define a numerical unit that they value. This could be a change in revenue, the margin per employee, the production capability, or the time allocation for each task. Whatever your company values, that would be your best indicator of growth.

Technicalities of Growth

While visualizing the success that comes with a growing company, we must also foresee its possible side effects. Real growth always entails new problems. Don’t worry, at least three of them will be internal and can be controlled.

The first and most common problem would be a decrease in quality. As your production or service copes with the sales demand, it is highly likely that your quality will decrease. On the other hand, those who refuse to sacrifice quality will have to extend the timeline of their mass production. This will result to slower service cycles or a slowdown in their production efficiency. The last and possibly the most difficult of all are management issues. Growing means you’ll need more manpower resources. Because human beings are unpredictable factors in the equation, there will always be errors and issues. You’ll have more people to train, more units to monitor, and more relational conflicts to resolve. On top of this, you’ll also have an influx of customer concerns, which must be properly addressed by specialized staff.

When I say that growth is bad, it’s because of all these countless problems. You’ll have more things to handle left and right. Of course, resolving these issues will also be worth it. It will give you steady success. So, whenever you think about doubling your revenue, you must also consider how this would also double your troubles. If you open your mind to both the negative and the positive sides of your business, you’ll find that these problems will be easier to handle. Rest assured that this firefighting stage in your business will eventually die down. Once this happens, you’ll be on your way to your “sweet spot”.

Luxury problems

Now, there are what we call “luxury problems”. Ironically, the presence of these problems means that you’re doing well. It’s the type of problems all businessmen want to have.

Let’s say, for example, that you’re in a bank and you’re trying to get a loan. You immediately begin with the hard truth— that you’ve just doubled your revenue but cannot maintain it without financial backing. You tell the bank or your prospective investors that you need fifty new employees, new equipment, or a bigger factory. Your problem is that you need these additional resources.

In the eyes of seasoned businessmen and investors, these are your “luxury problems”. The mere absence of resources means that there is a presence of potential. Once the lack of resources is solved, you’ll be on your way to achieving growth.

Of course, you’ll still have to handle the transition as well as train your new employees. These also become a part of your luxury problems. Therefore, it’s essential that you are still in a position where you can control your growth. Too much of it will make your business crash and burn. Remember— only go to a level that you can handle. If you think a twenty-percent growth is all that you can handle, don’t aim for thirty. Set realistic standards that are neither too high for your abilities nor too low that you remain in your comfort zone.

If you have luxury problems plus a good grasp on your business growth, you’ll definitely get the financial backing you’re looking for.

Every businessman must aim to have fully-functional and sustainable operations that no longer require them to solve minor problems.

The Growth Hack

Getting to the “sweet spot” of managing a business is not an option; it’s actually a must. Every businessman must aim to have fully-functional and sustainable operations that no longer require them to solve minor problems. Once everyone in your company knows exactly what to do and how to do it, fewer mistakes will occur. As a result, your services or production rate will be much more efficient.

The concept of “Economies of Scales” applies here. The bigger and more efficient your operations, the fewer resources you’ll need. This is the reason why it’s easier to grow when you’re already big. However, not everybody knows how to get here. This begs the question: Why is it so difficult to grow when you’re still small?

When we’re just starting, there is a lack of knowledge in proper computation. For example, if you aim to grow from 50 units to 100 units in six months, this duplication should happen without using too many resources. You’d want to grow the specific unit with the resources being at the same level or less. It won’t make sense to invest 150 only to reap 150, too. As businessmen, we must use our advantage to grow. In this case, the advantage lies in resource management.

Now, I’ve already mentioned about controlling your growth. Here’s another place of advantage: learn from others so you can skip all the trial-and-error. Unless you’re a one-of-a-kind startup, your problems have probably been experienced by others, too. Most people in the industry might have already found effective solutions. These, you can simply copy. By doing so, you can prevent problems and address them properly when they do occur. So, listen to their podcasts, subscribe to their videos, and read their blogs. Who knows? You’ll find new growth hacks.

Remember, growth is definitely bad if you cannot control it. We must be fully equipped with knowledge, resources, and an insightful mind to foresee these problems even before they happen. Eventually, we will get to a place of success. From there, the second round of growth will come much easier.