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Pros and cons of business growth

It is essential that you research and plan the growth of your business. If your business grows too quickly, or expands too much, you could experience financial, legal, staffing, resource and supplier problems. For business growth to be successful, it should be sustainable.

Common problems caused by rapid growth

  • You could outgrow your premises in the short-term. There may not be enough space for everyone to work efficiently.
  • Morale may drop if staff cannot cope with the extra work. Productivity can decrease.
  • There may be a shortage of cash to meet expansion costs. Taking on more and more work to generate more income places additional pressure on your premises and staff.
  • Management may be under pressure, operating reactively rather than proactively.
  • The quality of your products and services could drop, causing an increase in customer complaints. You may even lose customers to your competitors.
  • Staff turnover may increase due to heavy workloads. Vital knowledge could be lost as staff leave. Hiring and training new staff takes time and money.
  • Your business may lose touch with competitors' activities.

Read more about responding to rapid growth.

Growing to overcome problems

Do you want to grow your business because you are responding to strong competition, smaller margins or falling sales? Growing your business may help you to overcome these problems and attract new customers if you move to larger premises and increase your resources and stock.

However, growing your business because you are experiencing problems can sometimes make your problems bigger, with more money and risk involved.

Growing because of success

Do you want to grow your business because the cash is flowing in, profits are increasing and all your hard work is paying off? Your business may become a market leader if you take advantage of strong opportunities. You can capitalise on your success, expand into other locations, and employ more staff to cater for increased demand.

But if you expand too quickly you risk your business becoming unsustainable. Growth can put pressure on staff and resources, as well as financial and management structures.

Ask for help

We strongly recommend that you work with a professional business adviser to help you grow your business.

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