Is it better to grow your business slowly or drive it hard and fast? I’m not sure if there is right answer.
The “methodical” camp says that if you grow too fast you’ll outstrip your infrastructure to deliver. The “hard and fast” camp might counter with the notion that you’ve got to take every opportunity you get and just figure out a way to get it done.
For fear of being labeled as a schizophrenic, I’m solidly in both camps.
My first two years were methodical. I had one key account and a few smaller accounts. I managed it this way by design so I could get my footing.
Then year three hit. I added a second huge client followed quickly by a third. At the end of the year, I added a fourth. Go big or go home, I thought. During that period, some of my smaller accounts grew, too.
By the beginning of year four, I had increased revenue from my second year by 180%. It was at that point my best year ever, but I nearly killed myself and my business in the process.
Both survived (me and my business), but I learned three key business lessons that have me running things differently now.
1. Is the risk of losing quality and service worth the rapid growth?
Servicing one whale was do-able. Two whales was hard but fun. Three whales made me wish for gene cloning, and four whales had me hoping to get dragged under so I’d be taken out of my misery.
I had to bring on help quickly, faster than I wanted to. Because I wasn’t able to vet my help as rigorously as I wanted, I was always either having to correct for quality and service challenges or jump in and do the work myself. It created a consistent pattern where I felt like we never had the right amount of time to do the work and engage the clients the right way anymore.
I played a very risky game with quality and service. Failures in those two areas are not easy to recover from. Had it continued for longer than two years, some mishap was inevitable. The cracks were just getting too big. I simply got lucky.
2. How long can you sprint?
I remember saying to my wife at the end of the two years that I was never doing it again. It wasn’t worth it even with the huge revenue and profit numbers.
For the first time, I was running hard just to keep up.
The excitement of new business and epic revenues and profits kept me going for a while, but even that faded. In the numerous vortex periods where every customer had major deliverables at the same time, no amount of revenue helped when compared with the desire to just sit in a chair quietly for 20 minutes.
The risk was sustainability. I sprinted for two years. Even with unprecedented rewards, at some point your legs give out. The fear is that the rapid growth burns you out to the point where you don’t have the energy to do the basics anymore even after the rapid growth ends.
I had a several month down period where I had no energy but was fortunate to recover.
3. Are you ignoring business relationships?
During those two years, I went dark on my business relationship outreach. There was simply no time. In some ways, even maintaining the quality of business relationships with the four whales was hard enough, and I made some mistakes there, too.
I wasn’t building and cultivating new ones, either. I found myself almost starting from scratch in business relationships with people I had let go for two years.
So what do you do?
I had always believed as an entrepreneur that you have to take every opportunity. So I swung at every pitch that was even close to my strike zone. I hit most of them. Then chaos ensued.
In hindsight, I actually had a lot of options to manage my growth better.
I could have done a smaller amount for each client and built it over time. I could have staged the growth within each new client instead of landing “the huge” project that felt good for my ego. Or I could have simply made a cost/benefit decision to not swing at all.
I found myself only thinking of the financial and growth downside of not going for the home run. After living through the chaos, I have learned to be better at deciding what to swing at as well as how to selectively swing for the fences.
My company has settled into a nice revenue sustainability pattern for the past four years. My biggest lesson learned is that sometimes too much success too fast can actually cause your failure. I was lucky to survive it.
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