The Young Entrepreneur Council is an invite-only organization comprised of the world’s most promising young entrepreneurs. YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses. Read previous SmartBlogs posts by YEC.
If you enjoy this article, join SmartBrief’s e-mail list for our newsletters on small business and entrepreneurialism.
Q. What is one common mistake leaders make during periods of fast growth that I should avoid?
1. Spending money before it’s there
I’ve seen a lot of my colleagues get a little too excited a little too early during periods of fast growth. They want to display to their team and to their peers that the paradigm has shifted for them and that they’re doing better financially, so they purchase items that show that off to the world. I believe this is almost always done in haste, and way before they’re actually able. — Rob Fulton, Exponential Black
As we’ve scaled Influence & Co. from two to over 70 on payroll we’ve realized that great communication is the No. 1 driver of success during high growth periods. It’s really easy for a founder to keep their head down and focus solely on growth without communicating the vision to those around her, but continuous communication is what will keep the company and the people scaling with your vision.– Kelsey Meyer, Influence & Co.
Maintaining a high-quality product during fast growth periods can be very difficult. To help in this effort, it’s extremely important that you bolt down your processes with checks and balances along the way. Seriously though; what’s the point in growing if you are unable to retain that growth? — Russell Kommer, eSoftware Associates Inc.
It’s easy to get distracted by all the shiny deals and opportunity that present themselves to a fast-growth startup. Too often founders overcommit to these opportunities with exercising some discernment. Take your time to identify the right partners or opportunities and consider the risk/reward and cost/benefit analysis for each one. This helps keep you focused and on track to sustain growth. — Andrew Thomas, SkyBell Video Doorbell
As you grow quickly, you end up focusing so much on bringing in new business and scaling effectively. I believe it is mission critical to always go back to the front lines and to communicate with your lowest level employees. Make sure your brand ethos is making its way all the way to the foot soldiers so the foundation remains strong and supports the house as it grows. — Adam Brown, Sircle Media
It’s very easy during a period of fast growth (or even post-funding) to spend aggressively. “Yes, we should move from $1,000 per month to $1,000 per day for that advertising test.” You often cannot grow quickly without spending. But you need to spend with rigor. Stay disciplined with your pocketbook and declare your goals for any expense; track results and make sure that you’re spending wisely. — Aaron Schwartz, Modify Watches
As your organization brings on more and more new hires, it is critical to ensure that each hire is still carefully screened and vetted. Too often, facing pressures to scale, entrepreneurs make bad hiring choices for the sake of getting bodies in the door to fuel growth. Take the time to bring on the right talent. — Reza Chowdhury, AlleyWatch
8. Overfilling the top of the funnel
Most people think that growth is all about finding new customers. In reality, growth is more highly dependent on customer retention versus acquisition. Why? Let’s say you have 1 million potential customers. With zero retention, fast growth simply means that you will run out of customers quicker. That’s a one-way ticket to the deadpool. — Neil Thanedar, LabDoor
9. Pretending you’re not growing
Pretending there aren’t growing pains that come from fast growth is a mistake. If you’ve outgrown your office space, acknowledge the reality and keep staff updated on relocation efforts. If you’re struggling to scale a process, ask your staff to offer solutions based on their experiences. Make your employees part of the ascent, not victims of growth. — Faithe Parker, Marbaloo Marketing
Try to avoid the short-term thinking that comes along with the excitement and rush of a growing business. When you’re growing quickly it’s important to do what my mom did for me when I was young — buy pants that are too big so you have room to grow into them later. Focus on putting things in place that you’ll need in the future as opposed to only focusing on the here and the now. — Carl Dorvil, Group Excellence