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Salt Lake City Bookkeeping Blog

Is Having More Business Than You Can Handle A Good Thing?

Posted by Matt Roberge on Jun 6, 2014 7:00:00 AM

Too Many SalesWhile most small businesses struggle to create enough sales some may have too many. Too many sales may seem like a good problem to have right? However, have you thought that maybe having more business than you can handle might be a bad thing? You may tell this to a small business owner that is struggling to grow and they would think you were crazy. Years ago I would have had the same reaction. Also, when I hear someone at a networking event tell me they are too busy, I am not impressed I am astounded. How could you ever turn down new business? Let’s take a look at why too much growth might be a bad thing for your small business.

Lack of Scalability

High growth rates cause disruption and potentially inhibit upon the ability to scale your business. If your business grows too fast, you may potentially be in danger of failing. You need to be careful when you are growing too fast for what your current capacity can handle. You have heard the old clichéd phrase; nail it and scale it. You first have to create a repeatable process before you are ready to scale. Getting too many sales ahead of a process that is not ready for the growth is really bad for your business. Make sure that your business is scalable and sustainable before you go for big growth rates.

Sales Process Disrupted

Growing too quickly disrupts your sales process. The last thing you ever want to say to sales is slow down. You don’t want to tell customers that you are several weeks out if they need your product or service sooner than that. If your customer wants it and you can’t deliver it then they will find someone else that can. If you notice that sales are coming in to quickly and there is a bottleneck in your operations then you need to go back a step, you are not ready to scale.

Stressful Work Environment

High growth rates can cause a lot of unnecessary stress. You may feel the stress throughout your organization from sales right down through operations. If your organization is stressed it is not operating optimally. You may not feel the stress as a business owner because you are looking at projected sales and profits…and they look good! The problem is you are not seeing the big picture. You are looking at the present state of your business instead of 8 weeks from now. Is there a huge crash coming? Can you survive it? Will your employees see you through it? How about your customers? If sales are high, but stress is high throughout your organization you may have a major problem.

Customer Service Slips?

So let’s take a quick look at the worst case scenario. Sales are cranking, and I mean bringing in record number of customers. So what happens? Cash goes up and that is a good thing, right? What if operations can’t keep up with all the new customers? Will the customer service slip? Won’t you take away time from your current long-term customers to help bring on the new clients? Will that lead everyone in the process pissed off, both your current and new customers as well as your employees? How is that good for growth? The fact is it probably isn’t because you are going to lose some or all of your customers; both old and new.

How about your employees? What happens to them? They will most likely be overworked and stressed. Many employees will find themselves unsure of how to keep up with their current workload and the additional customers coming in. Some will most likely quit and others will stick it out. So when your customers start leaving will you keep paying your employees or lay them off? If you keep them there goes your surplus of cash. Can you now see why too many sales can be a problem? So how do we address this issue of growing to quickly?

The Art of the Small Business Dance

The solution to growing your small business too quickly is something I would call an art. The ability to grow a small business at the optimal rate is a skill that takes finesse, confidence and great leadership. The bottom line is that growing a small business is not easy. You have to know what your goals are and what you can realistically handle. Additionally you need to lead your business in a manner that keeps it moving towards its goals in the most optimal and efficient manner. This is not easy; this is an art. Small business and entrepreneurship is a wild ride with crazy highs and deep bottomless lows. Those that can’t handle the swings or don’t know how to keep their business on the right path often fail.
Now maybe you can understand why too many sales might not be a great thing for a business owner. The next time a business owner tells you they are too busy, don’t go wow that 'must be nice', just say you are sorry.

Has your small business ever grown too quickly? What did you learn and how did you fix it?

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Photo Credit © Dollar Photo Club / DoctorKan

Topics: Sales Advice, Small Business Growth, Scaling A Business, Small Business Sales