As an entrepreneur, it’s normal to get excited when your products or services are well-received. When your sales are up, you might immediately start scaling offerings, staff and even locations. However, this may be a premature decision.
It’s often difficult to recognize when you’re scaling your company too quickly, especially when you’re riding high on your recent successes. Below, 15 members of Forbes Coaches Council share some key signs that you may be expanding too quickly and how to correct course before it hurts your business.
1. You’re Not Meeting Your Success Metrics
Set time, volume and revenue thresholds for your company. Understand in advance what it would take for you to decide to change your plan before you have reached your goals, and put those requirements in writing. Knowing in advance what success looks like for you and for your product or service will help prevent you from feeling like you are more successful than you actually are. – Erica McCurdy, McCurdy Life Coach
2. Your Outflow And Profit Margin Ratios Are Off
Because startups don’t have a historical comparison and fads can fade, it’s important to follow management-by-statistics formulas to prevent applying the wrong steps at the wrong time. You are expanding too quickly if the outflow and profit margins start to go out of a normal ratio. To correct, evaluate and cap salaries of nonproduction positions until delivery and sales are streamlined. – Tracy Repchuk
3. Your Projections Are Based Solely On Early Adopters
Rapid sales of a new service or product often come from early adopters. This is a subset of your customer base; they are easy to appeal to because they are motivated to be an early adopter. However, these results can skew projections, as the timeline for attracting customers toward the top of the adoption curve can take increasing amounts of time and resources. Establish stability, then scale. – Kyle Brost, Spark Policy Institute & Choice Strategy Group
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