Grow Your Business Slowly

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Grow Your Business Slowly: A Cautionary TalePDFPrintE-mail
By: Debra Kahn Schofield

I remember the night my friend Jerry called me in a panic, asking if my college roommate and I would come to his workshop and iron nightgowns for him. Jerry, a recent graduate of the Fashion Institute of Technology, had shown some samples to a buyer from a large chain store. The buyer was so taken with the flannel nightgowns that she ordered 500 and expected delivery in five days. Unfortunately Jerry had materials for 50. Nevertheless he swallowed and agreed, fearing that nobody else would ever buy his designs.

Jerry emptied his bank account in order to purchase the extra bolts of material and trimming. He then called in all his favors, begging and bribing former classmates to help him cut and sew the nightgowns. Finally he called on people like me--who didn't know a bobbin from a spindle--to iron and fold the darn things. After several sleepless nights, Jerry fulfilled his obligation, tested his friends, and learned an important lesson. Don't promise more than you can deliver.

Growing a business too quickly is a dangerous proposition. If you lack the capital, manpower, time or other resources to deliver a quantity of product on time, you will either forfeit a customer or lose credibility, if not both. Take preventive measures against rapid growth. Let your advertising grow commensurate with your employee base, manufacturing capacity, quality control and financing.

Guerrillas know that it's essential to build a company on a solid foundation. Although it might be tempting to expand operations or increase products, it is important to put money back into the company and remain profitable. Too high a demand for products can send a small company into a tailspin. Start-up companies are often run on a shoestring, with a skeletal staff. When this staff gets stretched too thin, doing too much too fast, their judgment becomes impaired and the stage is set for mistakes and poor decisions. And once burnout sets in, apathy and negligence are sure to follow.

Overworked entrepreneurs should learn to delegate responsibility, utilizing temporary help if necessary. It is also helpful to seek out a mentor: someone who has survived similar growing pains and can offer sound advice.

Before you commit resources and funds to growth, see what you can accomplish without making massive changes. For instance, instead of relocating to a larger site, see if you can organize your current space more efficiently. If a lot of new customers are clamoring for your attention, be selective. It's better to refer business than do a mediocre job. Also, dismiss your bad customers; those who don't pay on time or give you a hard time for no reason. Reduce marketing and keep a low profile until you're ready to expand operations. Consider asking customers for a deposit that covers 50% of your production costs. Your cash flow will increase and non-committed customers will step aside.

Here's an old maxim that a smart Guerrilla once told me : "Only promise as much as you can deliver and deliver more than you've promised, and you'll always have happy customers."

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