Don’t make these 5 mistakes when expanding your business
So your business is going well, and you think it may be time to expand. Great! Congratulations! But before you go any further did you know that one of the leading causes of a business going under is over expansion? This is a crucial moment for your business, and you should know what to expect and what to avoid so you can get it right.
Here are a few things that could go wrong when you’re growing. By learning and avoiding the mistakes made by others, your business can have a better chance of success.
Hiring the Wrong People
Whether your team is growing by one or two hundred, it is vital that you hire the right people. In a poll conducted on post mortem startups, 23% of businesses said that their business fails because they didn’t have the right team. Take your time to know what you need and find the right people.
An Inability to Delegate
We get it; this company is your baby. You want to protect it and enact complete control in all areas. However, as you grow, you can’t do everything. Nine out of ten startups fail; one of the biggest reasons is a lack of communication and an inability to delegate. You hired your team so you can lead use them, so don’t forget to delegate.
Mismanagement of Employees
Explanation means bringing in more employees. Don’t forget that they are people too and that they have rights. Mismanagement and unfair treatment can lead to legal action and heavy fines. Your business probably can’t afford a lawsuit.
As your team grows, you may want to hire a knowledge H.R. member and perhaps speak to an employment attorney. As an employment lawyer in Toronto reminds us, the laws are complex and ever-changing, and a general understanding may not be enough to save you from backlash.
Overspending and Overexpansion
This is the biggest reason companies fail. Your budget is the single most important factor in expanding. Growing too fast and overspending can lead to a swift fall. There are some ways to avoid this.
- Remember to scale your business in the most crucial areas first.
- Make sure the kitty is nice and full before you grow.
- Only ever spend what you can safely lose.
- Recognize a lost cause and be ready to scale back when necessary
Poor Business Planning and an Unwillingness to Pivot
You have a dream, a goal, a business that is doing well, and a decent team, but it is the little things that make or break your business. A business plan is more than just a long term or short term goal. There are many factors to consider. Share your dreams with your team, be open to new ideas, and then sit down and outline a good business strategy.
Once you have a decent plan, try your best to follow it, but also don’t get too attached. Pivoting is another important factor in making sure your business will succeed as you grow. Pivoting your business strategy is sometimes subtle and sometimes a full turn around. The unwillingness to change your goals can sink a business, don’t be unyielding.
At the end of the day, expanding your business isn’t something you should be afraid of; it is vital to making it big. But you should approach it with a knowledgeable perspective. Learn from the failures of others and attempt to avoid these five mistakes.