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Avoiding the Downside of Rapid Growth

Posted by: Rod Kurtz on August 28, 2006

If a business has grown more quickly than anticipated, the first reaction may be exultation, followed by contentment to ride the wave and enjoy the fruits of its hard work. This can be a big mistake. Rapid growth sometimes has a tendency to pull the business away from its goals and objectives. Here are three important areas to manage during rapid growth:

1. Capital. It is easy to under-project the financing your business needs for expansion. Greater initial capitalization will help your business at critical junctures during growth.

2. The market. Continually monitor the market as the business grows. The need for more, and better, market research will help your business sustain its level of success. Ironically, as successful new ventures grow, entrepreneurs or members of the management team may come to believe that success will be continual and whatever the firm launches is likely to reach predicted margins. In fact, markets change continually. If the firm loses touch with shifting market needs, or if it relies on outdated market research (or insufficient market research), the results can be disastrous.

3. Innovation. Operating an innovative business that embraces change successfully is your key to survival. To do this, founders and managers need to solve problems using new approaches and search for new opportunities for the business.

Lisa Gundry, PhD
Co-author of Entrepreneurship Strategy
Professor of Management
Director, Leo V. Ryan Center for Creativity & Innovation
DePaul University

Reader Comments


June 6, 2010 7:00 PM

Yes. Fear for their souls. Just returned from a year in Sri Lanka, where children have few but cherished toys. Seems to me that American children are being taught to wallow in material toys rather than to play with, enjoy, imagine with a few toys, when the money would be so much more meaningful saved. Having numbing material choices is not developing imagination or pleasure; nor is it engaging the social or the natural worlds. I believe this is toxic for adults too--as pleasurable as "stuff" can be, there is such a thing as too much. I think Americans have turned a symbolic corner away from lasting values and into an abyss of wasteful, expensive self indulgence.

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