There is a lot of talk about growing your business. I’m probably the person that talks the most about it. As a scientist I know that there are laws that govern our universe, one being the law of entropy. Basically this law shows how everything is moving towards chaos. Without external input, everything decays; from the flower to the planets, to every object in the universe. You must add energy (like sunlight to plants) and effort (like water for plants) to ensure something is not simply existing but growing. Once an object stops growing it starts decaying.
So if growth is important, and it is, then how does growth kill the business?
The City That Grew and Decayed
The city I live in had a population of 50,000 when I moved here in 1991. Although our current signs are not up-to-date we are around 150,000 people. At some point, over 6 years ago, we were Canada’s fastest growing city and we were always in the top 3. It was a point of pride that many of our past mayors would evidence when touting the value of our city to those looking for a place to relocate. We have great natural resources available to us and everything else could be built.
The challenge was that the rate of growth was coming from the settling of new residents and not from the building of new business. The tax base for residential properties was not large enough to support the increase in users. The infrastructure of the city was being overburdened with the increased use while the funds to manage and maintain that infrastructure was decreasing. The bus system was insufficient to support the movement of workers to-and-from businesses. The new neighbourhoods had great roads, but there was no funds available to do more that patch old roads. Communications also made it to the newer, south-end of town, but other locations, heavy with industrial lands, were lacking. Schools were bursting at the seams with portables. My own kids went to an elementary school that had 11 portables and over 1000 students. When my son started junior kindergarten there were 10 JK classes.
This was a critical point for Barrie. If we were to continue down this path, we would be less likely to attract the new business we needed. Our clients were businesses bringing new jobs and taxes to our city, but we were not doing anything to attract them. We were simply focused on getting bigger. Without new business eventually people would be less likely to live locally and there would be a decline. It was a day of true clarity when it was decided that we would focus on reducing the amount of growth we would allow and increase our focus on attracting new clients (businesses) to relocate to or launch in our city.
Growth itself is an object that requires energy and effort. When we are trying to make something grow, we must also focus our efforts on the process of growth. If we are not constantly watching what is growing, supporting and managing it, we are losing track of the growth and allowing it to overtake everything else. Growth for the sake of growth is unwise.
If you don’t want your company’s growth to kill your business watch for these key indicators.
1. Your focus (or mission) is growth
If this is the case, you are likely not watching the metrics that define true success in a business. Simply having a 50% increase in business does not mean you can handle the extra work.
2. You only have time for “the new”
If, like my city, only the new things in your business get your attention and money, you are likely headed down the path of overgrowth without control.
3. You make more money but have less
Growth should support itself. If you have not determined the numbers to ensure your growth will create the income and profits that will support itself then your growth track is broken.
Your business must grow, but the growth must be under your control. You must have time to manage the growth and a plan to handle all the new aspects of the business. Don’t let your growth be the end of your business.
You will be happy to know that Barrie dropped out of the race for fastest growing city a few years back and with that change came true growth. The growth that is sustainable and manageable. The growth that supports its clients and all those involved. New roads in old neighbourhoods, new schools, more jobs and an increase in value. It was a smart business strategist that saw this frivolous egotistical position of “Fastest Growing City in the Country” for exactly what it was… The Fastest Decaying City – and he and his advisory board stopped it.