Growing in size is not the ideal for all companies. However, once any company does start to grow, they often lose the initial honeymoon-like appeal that they had when starting up. Sometimes, even the profits have to be redirected or re-invested into other avenues. Some companies who have a loyal customer outlet sometimes don’t gain very new ones and end up selling less than their quota goal and additional employees often requires capital extraction. Sometimes when one company succeeds in making a large profit, it can actually attract competitors-who have no intention of partnering with the company-who try to sell the customers on dealing directly with the suppliers.
This is why entrepreneurs need to be realistic and ready for just about any situation that they can think of. The honeymoon phase does not last forever and especially when an entrepreneur doesn’t have a sustainable plan for the worst, instead of delegating and trying to get solid advice, the entrepreneur gets caught up in fear and ends up going off the deep end. Many businesses have often gone out as a result.
In spite of all the technological advances since the turn of the century, the challenge of sustainable growth remains about the same for just about any business. In order to prevent the easy loss to competitors, every entrepreneur needs to have a strongly authentic purpose to start with. In other words, entrepreneurs are never truly ready to launch the business until they can describe upfront what it is that they intend for their company to do and why. Entrepreneurs also must be ready to re-examine the company’s purpose and determine whether it’s serving it well. They also must be make good investments both financially and emotionally.
The next thing that entrepreneurs can do to prevent too much loss of the initial elasticity is to choose-and maybe later expand on-their target audience. Entrepreneurs are only human and can’t have their company be everything to everyone. Instead, they should also rely somewhat on talented and experienced expertise and try small projects at lower investments. They also shouldn’t try to do absolutely everything themselves for the same reason. Entrepreneurs should also have a plan for inspiring and connecting to their target market. The key is for them to know exactly how they want the company to serve the public and reaching small tangible goals at a time.
Especially when an entrepreneur plans on a large growth, they should be on the watch for customer defection as it can decrease the company’s profitability by up to about 10 percent. One solution to this is to increase profitability by between 25 and 130 percent, depending on the field.
However, probably one of the topmost ways to prevent loss of flexibility is for the company to have a policy of staying flexible. Companies always go through evolvement stages and this requires a keen sense of strategy and even introspection, utilizing every relationship the company has, and continually investing in everyone’s capabilities. Check out this interview on The Australian for an additional perspective on this matter.