Friday, August 31, 2007

Fast Growth…Good or bad?

Recently my company, Buena Vista Custom Homes was honored by Inc. Magazine for our rapid growth. Inc is the holy grail of magazines for the American Entrepreneur and touts itself as “The Handbook for the American Entrepreneur. We were certainly thrilled to be selected by Inc., and by the way I would highly recommend that any aspiring entrepreneur subscribe to it, as their claims of being the “handbook” are very accurate.

After reflecting on the honor and the hard work by our team at Buena Vista Custom Homes to achieve this, it made me think of a question I get asked all the time. “Is fast growth a good thing or a negative thing.?”

Well first of all I think any business owner will tell you that that any form of growth is a good thing. This is what we are all in business for, but with growth comes many decisions that may have you questioning why you decided to be a business owner in the first place. Decisions such as cash flow issues, operational issues and providing the same level service that allowed you to grow in the first place. Also, with more business usually comes more personnel, which relates to more personnel issues. So, how do we do it?

My advice is to have a clear vision and written goals for your company. If you do so, you (and your entire staff) will know where you are headed and you can plan as an organization 1) how to get there and 2) what you are going to need to get there and 3) How you are going to operate once you get there. Also don’t be afraid to grow, if you have a solid business idea and the climate is right for your product or service, go for it. I think a mistake that many entrepreneurs make is that they try to manage growth by making determinations of their own how they will grow. Don’t make this mistake. For example, we sell houses and if I have 100 houses for sale and we pre-sell all of them, you better believe that I will find a way to build all 100 and deliver them with the same quality we have given, had we sold one home as well as finishing them on the customers schedule. I hear many entrepreneurs say this year we are going to grow and add one new employee. I think to myself, here is a person who is trying to manage how they grow and saying, “well we are adding one new employee and we should grow because we have this new person and however that relates to sales then great.” A better approach would be to analyze your business needs and potential and then make the correct decision. That correct decision may be to add ten new employees or to cut two that you already have.

Think growth!! Prepare for it, be smart about it and embrace it. I hope to see all of you in upcoming issues of Inc Magazine!