Management becomes so involved with trying to administer all of the new operations acquired that it losses track of the essential business functions. A company s risk of failure also increases given an overly centralized management team that lacks depth. A growing company must be able to recruit and retain personnel qualified and capable of taking the company to its next phase of growth. Mounting overhead begins pinching over vital expenses. Bureaucracy rears its head in the form of more memos, meetings, and buck passing, further compounded by a defective monitoring and information systems.
Customer complaints increase and satisfactory servicing becomes a problem.
Oftentimes, in pursuit of greater success, companies grow quickly that their back-end support system, delivery and order fulfillment sections fail to catch up. Over dependence on a key customer, supplier, lender, or contract is another pitfall for growing companies. Small companies should try to diversify their product lines, geographic trading areas, distribution channels and targeted markets. All rights reserved. Click here for Terms of Use and Privacy Policy applicable to this site.