All growth is good, right? Well, yes and no. Growth is usually seen as a positive thing. When a business grows, in theory, revenues grow and profits grow. However, this isn’t always true.
We have all seen it, even if we didn’t pay any attention to what we saw. Many companies adopt the belief that a company must “Grow or Die.” These companies begin to grow for the sake of growth without any real idea of why they need to grow or how they need to grow.
Some companies adopt the idea of throw a bunch of stuff up on the wall and see what sticks. They will try acquiring companies, opening new locations, adding new products, and extending product lines without any real thought to where they are going.
First a company needs to take stock of where it is now. Are our financials in order? Do we have the money to grow? Why do we want to grow? Do we want more market share? Do we wish to diversify our offering? Do we want to expand into new areas? What is it we seek to accomplish by growing?
The bottom line needs to be, will it add value to the company? If we grow but have to take on excess debt, have we really improved the company? If we grow but give up control of the company, is this a good thing?
How will growth affect our people? Will it give them job security? Will it improve their lives?
I am taking a course at The Universityof Virginia Darden School of Business. The professor is Edward D. Hess. He is the author of the book Grow to Greatness: Smart Growth for Entrepreneurial Businesses. In this course Ed makes the assertion that one must apply common sense to growth. The course is free and is available via courser.org .
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There is no one right answer to any business question that will cover all circumstances. Please Visit McClendon Enterprises