7 Risks that Come from Scaling Your Business

By AJ Agrawal

So you’ve launched a business and you’ve gotten a taste of success; you’re thinking you may be ready to start scaling up, taking your business to the next level and driving revenue through the roof. But as you grow, your resources and investment has to scale proportionately, and you need to ensure your infrastructure and organizational systems can handle the scaling. If you aren’t adequately prepared for the scaling up process, you could risk your entire business. Consider the following risks that are associated with business growth before initiating any measures to scale your startup.

  1. You’ll work long hours. Many entrepreneurs struggle to find work-life balance, and if you’re already feeling the weight of the enormous amount of time, effort, and energy it takes to generate and sustain business, remember that it will take just as much work to scale up every step of the way. Growth doesn’t happen overnight, so you’re bound to be working overtime for quite some time before you start seeing results from all that investment; even hiring an entire team to help you out won’t get you off the hook for giving it all you’ve got to grow bigger and better.
  2. Your existing customers may feel alienated. In order to scale your business, it’s going to be necessary for you to divert a lot of time, attention, and resources to growing your audience, exploring new markets, and attracting new customers. Chances are good that your loyal customers — the ones that have brought you all your success in the first place — have come to expect a certain level of customer service, and they may be frustrated by changes associated with growth. Especially if your business’s scaling means developing new products, existing customers may worry they’ll miss out on the original draws your business offered.
  3. You may be caught in the tide. According to Entrepreneur, “many rapidly growing businesses get burned by investing in more capacity and taking on higher fixed expenses, not realizing that their growth may be a temporary thing.” As the old saying goes, it’s critical that you don’t put the cart before the horse; make sure you’ve got a solid system for predicting demand, sales, and trends and that you have a plan for adjusting both fixed and variable expenses to stay profitable regardless of market fluctuations. Of course, it’s not really about being able to predict the future; it’s really just about having flexibility built into your business plan to protect yourself should you find yourself caught in a tidal market.
  4. You may expose yourself to legal issues. Scaling up usually necessitates hiring more employees, which opens the door for human resources related legal issues. Depending on the number of people you employ, you may be legally required to offer health insurance and other benefits, and laws vary widely regarding hours of work, breaks, downsizing and layoffs, and other employment rights issues. As your business grows, it will become more and more necessary to understand how the Go to the full article.

    Source:: Business 2 Community

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