Six Signs Your Company Is Growing Too Fast

Is your company experiencing rapid growth?

One of the keys to keeping your company on track while you are growing quickly is to catch problems early and be aggressive about solving them. Here are some early warning signs to watch out for:

Sales forecasts are unreliable
You need accurate sales forecasts so you can budget, manage cash flow, predict production requirements, and staff appropriately in all departments. If your forecasting methods aren’t working anymore, it may be time to evaluate more sophisticated forecasting tools and techniques.

Sales compensation is out of control
Is sales compensation increasing faster that sales? If are paying more in sales compensation than is warranted – and it is coming straight out of your operating income. The causes of this can be varied; for example, salary bases might be larger than needed when combined with your incentive plan, or accelerators in your compensation plan might not be defined at the right points anymore, particularly if your deal size has changed.

Sales productivity drops
It’s not easy to spot a reduction in productivity, but this can be a critical issue. Companies that are under pressure to grow fast are not always as diligent as they would normally be in hiring and training. As a result, sales associates are not as effective and sales costs more than it should.

Peter Principle is beginning to rear its head
It’s not unusual for companies to promote people above their level of training and experience during periods of rapid growth. For example, the company’s best sales person might be asked to manage sales. While they might have a deep understanding of the market and be highly effective at selling, that doesn’t mean they know how to build out and manage a sales team.

Production gets surprised

Without proper coordination between sales and production, sales people can promise delivery schedules that production can’t meet. They might tell a client that software development will start or finish on a certain date when that simply isn’t possible.

Cash flow issues surface
As sales increase, working capital needs to be assessed. Exploding sales is exciting, but can significantly impact cash flow.

A Sales Growth Assessment can help you take a comprehensive look at your sales and marketing processes, diagnose your current situation, and make recommendations for next steps. Check it out here.

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