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Growing Pains

June 8, 2010

Women TIES member Terre Slater, President of Empire Interpreting Service,  and I are two of the three contributors to the bi-weekly Post Standard “Ask the Entrepreneurs” column. This week’s question was an interesting one on expansion and growth. I thought readers of my blog could benefit from the question and answers.

Over the past five years running Women TIES, I have had a number of women faced with this situation. In most cases, they just grew too quickly without taking enough time to  judge the different regional market before they took the leap. I have also had conversations with numerous women who have successfully grown their businesses. In every instance, a slower more conservative approach served them well. They began expansion in the prospective growth region by gaining clients before investing alot of money in creating a physical space in the location first.  These women also said they made sure to have enough money to tackle challenging expansion issues they couldn’t foresee before making the move.

This week’s question was: “I doubled the size of my business a couple years ago by increasing my rental space and number of employees. Now my sales revenue has dipped and I’m losing customers. What do you think I did wrong?”

Tracy:

Something similar happened to a small company in our community when they decided to triple their building size and staff. Unfortunately when they grew they forgot what made them unique which was excellent customer service and a welcoming business environment. Today they are out of business.

Every company has a unique market niche that attracts customers. If you do your job right as an entrepreneur, you create a loyal customer following based on your niche. Although growing is an essential part of business, you can’t grow so fast that you lose what you are known for – no matter what that is. Sometimes a more conservative growth plan works. I suggest you take a look back and analyze your unique position in the marketplace, survey current customers for instant feedback, and revise your marketing plan based on these two tasks. It’s not too late to make adjustments to get your business back on track. Trust in your abilities and make necessary changes now.

Theresa:

It’s impossible to say what you did wrong without knowing the specifics of the situation. Most importantly would be that any business owner look at their return on investment each time they add employees and/or expand space. What was the anticipated outcome of each move and how did you measure that outcome?

My second concern would be that you evaluate why your sales has dipped;  are you losing customers because of a lack of quality control and you’ve grown too quickly or are you losing revenue due to the economy in general?

This is a time to bring in your support team;  your CPA to help you understand your numbers better, your attorney to see what your options might be regarding your rental property and your banker to see where your lines of credit stand and how this is affecting your relationship with them.

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