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5 Common Small Business Mistakes to Avoid in Accelerated Growth

Growth, success, expansion, and scaling up are all very exciting words for any business. However, did you know that accelerated growth (when not handled properly) can potentially destroy the company? Many start-ups and small businesses learn the lesson the hard way. When a small business suddenly hits the accelerated growth stage, it is crucial to avoid the five common mistakes and risks.

  1. Drop in the Quality of Customer Experience
  2. Employee Burnout
  3. Cash Flow
  4. Lose Sight of Competitors
  5. Undervaluing the Importance of R&D

1. Drop in Quality of Customer Experience

Rapid growth in business means there is an increase in demand for the business's product or service. In other words, an increase in the number of customers who are curious to know more about the product or service and there will be a ton of both positive and negative feedback towards the company. According to Microsoft's research, 63% of American consumers will use another product or service after experiencing poor customer service. On the other hand, Salesforce research revealed that 78% of consumers are willing to continue business with a company even after a mistake if they have experienced excellent customer service. Thus, it is essential to make hiring matching the business's growth in the support or customer experience team to maintain or improve customer support satisfaction.

 

2. Employee Burnout

Often upper managements are too focused on the growth and the increasing profit that employees' well-being is ignored. Businesses cannot blame employees for feeling burnout. As stated in the Harvard Business Review, "burnout is more than just an employee problem; it's an organizational problem that requires an organizational solution." As accelerated growth in business will naturally create more work for existing employees, the company needs to find ways for employees to work-life balance and completely disconnect from work to avoid losing talent. The studies show that having employees complete disconnect from work and having enough rest will allow:

  • Higher productivity level
  • Higher engagement
  • Increase Creativity
  • Higher Retention Rate 

Moreover, on the managerial level, it allows managers to perform reactively than proactively. Especially for start-up and small businesses, it is more important to be in a good relationship with the best talents in the company who were loyal and grew together, having an in-depth understanding of the core value. Moreover, Glassdoor states that "the average cost per hire is almost $4,000" and takes more than a month to hire new talent, which means losing talent could be the break in sustaining growth. Therefore, it is crucial to look after employees in times of exponential growth. 

 

3. Cash Flow Crunch

Cash flow crunch is the most common mistake made by small businesses. An increase in growth means an increase in money flowing into the company, but at the same time, it means an increase in expenses to sustain the service or supply the product to meet the demand. Start-ups and small businesses mostly don't have experience managing a high volume of money going in and out, which opens doors to higher expense without realizing it. Consequently, it leads to poor cash flow and ultimately stops the growth and impactful enough to destroy the entire business. Therefore, it is crucial to modernize the payments system by using software like Plooto to automate payments and receivables, leave a full audit trail, reduce manual work, and increase accuracy while saving time. As cash is required for any business to operate, it is vital to avoid creating a bottleneck in the cash flow.

 

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4. Lose Sight of Competitor

Start-ups and small businesses need to continue to research their competitors to differentiate their product or service and place it in the market as a unique product with greater value than the competitors' products or services. However, due to businesses' accelerated growth, companies may get heavily focused on the growth, not allocating bandwidth to maintain the competitor's research. Understanding the competitors and the new entrance in the market is vital to staying in the lead to capture the majority of the market share. Moreover, knowing the updates will allow the business to remain innovative and up to date to not lose to the competitor.

 

5. Undervaluing the Importance of R&D

When the product or service has sudden demand in growth, thinking that it is good enough for your customer is a big mistake. Modern-day consumers are continuing in search of the most innovative product of service available in the market. An article published by Deloitte states that "consumers expect the next thing to be the next big thing—and when it isn't, they don't hide their disappointment." Therefore, regardless of how well your product or service is doing currently in the market, research and development (R&D) is critical to maintaining the business's growth and should never be put aside

 

Get into an early habit of practicing to avoid these five common mistakes or establish a solid plan at an early stage so nothing can stop the momentum of your business growth from being the next business to be part of the big acquisition or IPO. Plooto is here to support small and medium-sized companies' growth, so take advantage of the 30-day trial today to have your full plan in place.

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