It sounds almost counterintuitive, but sometimes when you’re growing a business, quick successes can often do more damage than good. That is, if you don’t know how to manage it correctly. Growing a business is tough, and raising investment capital can poise a variety of challenges. For some companies, rapid growth can propel them instantly into the spotlight. It kind of has the snowball effect: bootstrap your company with sweat equity, develop your idea, raise significant capital, then go public or sell all or part of your business. This may seem like a dream if you’re just starting off, but fast growth isn’t necessarily the best growth. And if you don’t manage your rapid success, it could actually hurt your company’s future. Here’s why.
Smart investments are often better than big investments
If you’re growing a business from the ground up, you’re going to need some big investments. Getting the capital you need to push forward is all about good communication, networking, and setting up the right strategy to make it work for all parties. But it’s easy to get distracted by big offers up front. Your chances are limited when growing a business, and the pressure to get as much capital as you can in the beginning can be intense. It can also set you back for future successes if you’re business isn’t a great match with your investors.
We can’t stress enough how important it is to simply trust your gut instinct. The right investors are out there, but it takes a lot of strength to say no, if the shoe just doesn’t fit. Pitch to investors you know will help have your back for the long haul. Do your due diligence and make sure you know about your investors’ track records. Most importantly, make sure you can manage your investments properly to support longevity, not just overnight success.
Always prepare for fast growth, even if you haven’t seen it yet
It’s easy to get lethargic when your company is moving slowly, but this is actually the best time to prepare for success. Yes, overnight success is rare, but fast-moving financial growth isn’t, especially with today’s climate of deregulated investment potential and easy access to networking between investors and businesses. In the investment world, when you’re hot you’re hot, and a good initial capital investment can start a domino effect with other investors who want in. You need to be prepared for this, and ready to take rapid growth head on. After all, growing a business is all about growth, isn’t it? How you handle yours will determine the longevity of how long you can sustain it.
Make smart hires, and don’t sacrifice quality for quantity
One of the first things you’ll need to do if your business grows rapidly is hire rapidly. This can be a big challenge. Finding a good staff on short notice may seem impossible, but it is critical to take your time, and only hire what you truly need. Go through the vetting process thoroughly, rather than just filling positions, and ask yourself “do I really need this person in order to grow long term.” We are so used to the traditional corporate structure that often times we forget what got us here in the first place: Innovation.
Think outside of the box and make hires that can cover multiple needs as you grow. Getting adaptable people to make long-term commitments will not only save you time, but also help you structure your company quickly, and cut out paper titles which can slow you down.