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When Joe Walsh, Glenn Frey and Don Henley of the Eagles wrote Life in the Fast Lane in the late 1970s, little did they know how fast that lane would become. In an Amazon world where we can order anything online and have it delivered within a few hours, our expectations have changed. We live in an “everything, all the time” world. Even the speed at which we watch and listen to online content has changed. Speed-watching has become a thing. For example, on YouTube to save time, you can increase the speed of a video to watch it faster.
How do these increased expectations impact business?
Investors may be inclined to look for a “hockey stick” pattern, in which there’s a short period of steady growth followed by a dramatic period of exponential growth. This can influence startups that are looking for funding to focus on things that may offer quick growth in the short-term that may be unsustainable in the long-term. While rapid growth can be a good thing, it’s important to not get overwhelmed by that growth. The danger for startups that experience exponential growth is that they can’t keep up with demand over time and end up scrambling to meet quality and service standards. Slower growth allows a business to set up proper systems to ensure operational efficiency and scalable growth.
The Tortoise or the Hare Approach to Growth
Most startups begin with an entrepreneur who has an idea of a solution to a problem. That person does everything themself in the beginning, as they struggle to get the business off the ground. Eventually, as revenue starts to roll in, they can begin to hire people to support them.
As the team develops, they learn from trial and error and start to put systems and processes into place. If a business is experiencing explosive growth at this point, it may not have the time to put the proper systems in place. This can lead to poor quality or customer service issues, cash flow difficulties or HR problems. Managing staff workload is crucial to successful growth. Turnover can increase if the workload grows too quickly. This is where being the tortoise instead of the hare may be the better path to stable, long-term growth.
Aim for Sustainable Long-Term Growth
If you are experiencing rapid growth, you are obviously doing something right. Take the time to analyze what has led to your growth and how you can keep the momentum going without sacrificing quality or service levels.
If revenue is flowing in and profits are increasing, it may be time to expand and capitalize on that success. Sustainable growth is a great thing — if you have the systems in place to handle it. If you are a product-driven company, growing rapidly allows you to benefit from economies of scale. This can save money and increase your profit margin.
Quick growth may bring the attention of outside investors or investment bankers. If you have a long-term exit strategy, this could be a path to achieve that outcome. If you don’t plan on selling, don’t lose your focus and let this distract you.
Analyze Your Growth Objectives
The rapid growth stage of a business is exciting but also offers many challenges. Don’t let the current ethos of “everything, all the time” color your expectations for your company. Take a good look at your growth objectives: Are you growing for growth’s sake or to become more profitable? Take a good look at your employees: Do they have the required skills to handle the growth? Take a good look at your cash flow: Do you have the capital to fund that growth?
If you are achieving positive cash flow, have strong leadership and the systems in place — and see increased demand from your customers — it is likely time to grow by entering new markets and increasing your customer base. At this point, it’s important to have a set of core company values that will be the glue that holds everything together as you grow from a startup with a few people to an organization of perhaps hundreds of employees.
By positioning the business to exemplify your mission and core values as a foundation for everything you do, future growth will be in line with all your core values. Start with a deep dive into your own goals for business growth, determine how quickly you want to get there, plan for sustainable growth and analyze your growth objectives. Keeping these critical aspects in mind and applying your core values create a formula for successful sustained growth.