Have you been in or seen this situation.  You establish a business and get the formula right.  Things are growing swimmingly; sales are increasing, the money is rolling in, you start to put on staff, invest in more stock, which brings more in more sales, you hire more staff to handle the increased business.  And so it goes on.

And on and on, for a while.  You are revelling in your success in business, and maybe even indulging in a few luxuries to reflect your success.  But almost imperceptibly life starts to get more difficult.  You find you are spending more time at work, there are more problems to solve, and the bills seem to be harder to pay despite the sales continuing to go up.  It has become hard work and you're not enjoying the business, or life as much.

And the enjoyment gets less and less as the whole business just gets more and more difficult.  Suddenly you are not longer the rapidly rising business.  In fact you are going......nowhere.  You've hit the business brick wall.

Rapid growth typically leads to a business hitting a brick wall.  The brick wall has three major elements:

  • Systems - the systems good enough for a business of (say) three people may not be enough for 10 people.  And that for 10 people may not be good enough for 25, and so on;
  • Management skills - the same applies.  As the business grows management must spend more time managing than ‘doing', more time chasing business, understanding the finances, supervising staff etc.
  • Cash flow - more money gets tied up in inventory, work-in-progress, and debtors.  The inventory must be paid for but the debtors are slow to pay.  The more orders to process, the more that are urgent, the more stop-start you get, the less that actually get through when they are supposed to.  And the more mistakes people make.

Businesses can, and do, hit a brick wall more than once as they grow, particularly if they are growing rapidly.  Because they are growing rapidly they don't have the time to step back and look at what is happening.  They don't have time to spot the obvious.

So if this is you, take the time to step back to see the brick wall before you run smack bang into it.  And if you do that, the brick wall will just prove a mirage on the road to success.  What do you do when there is a mirage on the road ahead?  Why, you just cruise right through it. 

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PS.  If you would like to comment on this tale please contact me.

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