According to a recent survey conducted by start-up statistics trends, a bit more than 50% of small businesses fail in the first four years. Some of the noteworthy stats are as follows:
- Of all small businesses started in 2011:
- 4% made it to the second year
- 3% made it to the third year
- 95% made it to the fourth year
- 3% made it to the fifth year
- The vast majority of start-up funds (82%) came from the entrepreneur himself or herself, or family and friends.
We cannot blame the entrepreneurs to think that rapid growth and record-breaking sales numbers equate to success when they launch their business We can observe how start-ups leverage the overwhelming media outlets to boast incredible spikes in their customer base and the revenue generated. It’s not difficult to understand that companies that don’t see fast growth feel discouraged. But the important question is,
“How will this immediate success contribute to future goals of the business? Is it sustainable? ”
In a business, growth should be slow and steady. You may draw an inference from the tortoise from the classic fable “tortoise and hare”. You do not want to go to the head of the competition so fast such that you end up burning out well before the race is over.
The yearning of moving the business in the market at the earliest is always prevalent amongst business owners, otherwise, the business may become obsolete or a competitor may take the game away from you by being the first of its kind in your domain. Such a mentality comes naturally to the business owners, considering they have invested millions in one way or the other, but when it comes to long-term development and desired growth rate of your business, it’s not the apt strategy for building a successful company.
According to Jay Jumper, president, and CEO of electronic signature service company SIGNiX, “deliberate, steady maturation, characterized by careful research and long-term forecasting, allows a company to position itself for enduring success and sustainability."
Maintaining slow but steady business growth
In an age where people and companies seek quick resolutions and have decreasing patience and smaller attention spans, "slow and steady" is not an easy fundamental to follow. Here are a few tips for the accomplishment of the slow yet steady growth rate of your business.
Take your time, but act promptly when necessary
The approach sounds contradictory at first but has helped many businesses stay ahead of the competition. Here’s a fact to support the above statement; "There is, for some companies, a temptation to grow rapidly just to stay in the headlines," Stephen Sheinbaum, founder of alternative financing company Bizfi said. "It took [Bizfi] 10 years to reach $1 billion in funding originated, and that was absolutely the right pace of growth. We took the time to refine our underwriting, and as a result, we are extremely happy with our portfolio's performance. Not every company in alternative finance can say that."
While it's a great idea to slow down and enhance your product or service, you simultaneously need to take a notice of the opportunities that can help you increase the growth rate of your business and the moment you find one, don’t think for a moment and be ready to move in and seize it.
Hiring right set of people for a right job at the right time is essential
Hiring the right people at the right time is very crucial. Hiring more staff to corroborate growth is a double-edged sword: You'll have more employees to get your "growth" work done, but you'll also have a much larger payroll, which could eventually hurt you if the projected growth of your business is slower than expected. .
To maintain the growth rate of your business, it’s wise to invest in people, but only the ones who can add to the growth of the business and those who possess the skills in the areas in which your business wants to expand. In the presence of proficient co-founders and early employees, you need individuals to create a team that is skilled in all aspects.
Keep your cash flow in check at all times
It’s a misconception that fast and rapid growth guarantees future burnout, whereas slow growth guarantees longevity. It all comes down to how smartly and efficiently you take crucial decisions and steps so as to reach your business goals or objectives, irrespective of your growth rate. What determines your success is the way you manage your company such that cash flow is maximized.
It is of utmost importance to keep a balance between investing into marketing and staffing and spending time and money on innovation. Both these factors play a huge role in long, lasting growth of your company.
Keep one eye on your future goals, rather than just acting on current trends. It’s needless to say that you need to be completely aware of your competitor if you are in a progressive industry like technology. A strategy formed on the basis of on-going trends will surely be fruitful in terms of instant results, but along with that, planning for the future will help you attain a sustained growth rate of your business. Many renowned professionals believe in envisaging long-term goals from the beginning. You need to plan how your product or service would perform or look like in a decade or more into the future.
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