{"id":2336,"date":"2022-12-14T02:36:27","date_gmt":"2022-12-14T02:36:27","guid":{"rendered":"https:\/\/www.b2bcfo.com\/peggy-head\/?p=2336"},"modified":"2023-04-18T21:48:18","modified_gmt":"2023-04-18T21:48:18","slug":"5-types-of-growth-your-business-should-avoid","status":"publish","type":"post","link":"https:\/\/www.b2bcfo.com\/peggy-head\/5-types-of-growth\/","title":{"rendered":"5 Types of Growth Your Business Should Avoid"},"content":{"rendered":"

Perhaps the headline of this article has surprised you\u2014and that in itself is not too surprising. More often than not, growth is taught to be equivalent with success, profits and progress.
\nA growing business is what most CEOs and small business owners dream of, but what isn\u2019t talked about enough is that there is such a thing as bad growth. Types of Growth:<\/strong><\/p>\n

Organic business growth is accomplished through natural expansion, whether it be new offered products or another store opening because of the original store\u2019s sales. Organic scaling consists of a business simply doing well\u2014but this isn\u2019t a long-term strategy. Strategic: Strategic growth is often made after the organic growth has played a role in the business expanding. This is because organic growth can provide the funds and the foundation for a business to now turn to strategy and tactics like adopting new technology, hiring more employees, investing in new inventory, etc. in order to strategically grow in the market. Internal: Internal growth is when a company starts looking inward on its resources, staff and equipment\u2014and sees where there is room for opportunity and optimization. Essentially, it\u2019s when a company can merge teams, or have an employee with extra time take on more responsibility, or find a way to repurpose or re-use certain products and materials or resources.<\/p>\n

External: External growth can be made through a merger, partnership or acquisition with another business. This growth comes with the most risks because a CEO has to calculate whether it\u2019s a smart financial decision to collaborate and use\/combine another business\u2019s resources with the business.<\/p>\n

The Ugly Reality<\/strong>
\nAny growth can sound promising, but if the growth is happening for the reasons listed below, it\u2019s not a good growth for the company.
\nFor example, a CEO can watch their company internally grow but it means his or her employees are suddenly becoming overworked and burned out. This can then lead to high turnover over time and more money spent on hiring new staff. Another instance could be strategically spending more money on investments like marketing, influencer contracts, inventory, or renting of space in order to grow the business, but in reality, the costs are rising high and the profits and capital cannot actually cover these expenses.<\/p>\n

Tackling the Five \u201cBad\u201d Situations<\/strong>
\n1. Cost of Expenses Are Higher Than Profits\u00a0<\/strong>
\nWhile it\u2019s normal for a scaling business to increase their expense list, be sure to work with a\u00a0 financial expert and business advisor to ensure the list is in proportion to revenue. You want to avoid growing larger as a business but becoming less profitable in terms of your net profit
\nmargin decreasing. To avoid this situation, keep in check whether you\u2019re over-hiring, pricing products or services incorrectly, over-spending, over-investing and becoming irresponsible with the company\u2019s financial decisions.<\/p>\n

2. The Wrong Clients<\/strong>
\nIf your business relies on clients, be sure that no one client has a monopoly on your business or they can start to raise prices, hold all the cards in your revenue and insist on certain inefficient\/ costly processes\u2014making your brand become all about them. The ideal for your business is to have at least more than four clients, and for no one client to own more than 10% of your revenue.<\/p>\n

3. Uncontrollable Growth<\/strong>
\nWhen a business has inexperienced leadership, not enough capital to sustain new customers, new spaces, new products or new technology, it can eventually run out of cash. Signs of uncontrolled growth are usually when cash inflows are lower than outflows, when there
\nis high turnover and new employees do not have the experience to fill those shoes properly and when customers are starting to notice the
\nservices or products aren\u2019t quality anymore.<\/p>\n

4. Unsustainable Revenue<\/strong>
\nThe best example of this is a business that has 10 clients one year, but needs to make sure all of them are replaced the following year due to 1-year contracts. Your business should aim to have loyal customers or clients, otherwise you\u2019re spending resources on constantly finding
\nnew revenue. Whether it\u2019s creating rolling or long-term contracts, subscriptions, or framework agreements, it\u2019s crucial to have customer retention.<\/p>\n

5. Constant New Staff (High Turnover)<\/strong>
\nThe Great Resignation as of late is proving how critical of an issue this can be. If a company begins to scale but it comes with a toxic work culture where there\u2019s increased work overload, aggressive deadlines, no room for error or bad\/inexperienced managers\u2026 good employees leave. And that can mean less quality work and more money spent replacing them.<\/p>\n

6. The CEO Conundrum<\/strong>
\nSome businesses grow internally, externally, organically or strategically because the CEO is breaking his or her back ensuring it. If the CEO\u2019s funding, time, relationships, etc. are the only reason a business is growing, it means it\u2019s not sustainable. The business should be able to stand
\non its own two feet.<\/p>\n

Working With B2B CFO\u00ae<\/strong>
\nThe best way to avoid any growth for your company that can lead to distress, business failure or financial hurdles is to work with a trusted financial advisor or CFO. B2B CFO\u00ae Partners possess the deep business experience, financial background and objective counsel to guide you along the way to make smart financial, strategic decisions that lead to sustainable growth\u2014and a healthy business!<\/p>\n","protected":false},"excerpt":{"rendered":"

Perhaps the headline of this article has surprised you\u2014and that in itself is not too surprising. More often than not, growth is taught to be equivalent with success, profits and progress. A growing business is what most CEOs and small business owners dream of, but what isn\u2019t talked about enough is that there is such…<\/p>\n","protected":false},"author":262,"featured_media":2337,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","cybocfi_hide_featured_image":"","footnotes":""},"categories":[22,21,20],"tags":[],"class_list":["post-2336","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-advisor","category-cash-flow","category-cfo-advisor"],"acf":[],"yoast_head":"\n5 Types of Growth Your Business Should Avoid - Peggy Head<\/title>\n<meta name=\"description\" content=\"B2B CFO\u00ae Partners possess the deep business experience, financial background and objective counsel to guide you along the way to make smart financial, strategic decisions that lead to sustainable growth\u2014and a healthy business! 5 Types of Growth Your Business Should Avoid\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.b2bcfo.com\/peggy-head\/5-types-of-growth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"5 Types of Growth Your Business Should Avoid - Peggy Head\" \/>\n<meta property=\"og:description\" content=\"B2B CFO\u00ae Partners possess the deep business experience, financial background and objective counsel to guide you along the way to make smart financial, strategic decisions that lead to sustainable growth\u2014and a healthy business! 5 Types of Growth Your Business Should Avoid\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.b2bcfo.com\/peggy-head\/5-types-of-growth\/\" \/>\n<meta property=\"og:site_name\" content=\"Peggy Head\" \/>\n<meta property=\"article:published_time\" content=\"2022-12-14T02:36:27+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-04-18T21:48:18+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.b2bcfo.com\/peggy-head\/wp-content\/uploads\/sites\/228\/2022\/12\/Growth.png\" \/>\n\t<meta property=\"og:image:width\" content=\"940\" \/>\n\t<meta property=\"og:image:height\" content=\"788\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Peggy Head\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Peggy Head\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/5-types-of-growth\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/5-types-of-growth\\\/\"},\"author\":{\"name\":\"Peggy Head\",\"@id\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/#\\\/schema\\\/person\\\/14fed8b1ae527666a4679c594dde7698\"},\"headline\":\"5 Types of Growth Your Business Should Avoid\",\"datePublished\":\"2022-12-14T02:36:27+00:00\",\"dateModified\":\"2023-04-18T21:48:18+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/5-types-of-growth\\\/\"},\"wordCount\":899,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/5-types-of-growth\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/wp-content\\\/uploads\\\/sites\\\/228\\\/2022\\\/12\\\/Growth.png\",\"articleSection\":[\"Business Advisor\",\"Cash Flow\",\"CFO Advisor\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/5-types-of-growth\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/5-types-of-growth\\\/\",\"url\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/5-types-of-growth\\\/\",\"name\":\"5 Types of Growth Your Business Should Avoid - Peggy Head\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/5-types-of-growth\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/5-types-of-growth\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/wp-content\\\/uploads\\\/sites\\\/228\\\/2022\\\/12\\\/Growth.png\",\"datePublished\":\"2022-12-14T02:36:27+00:00\",\"dateModified\":\"2023-04-18T21:48:18+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/www.b2bcfo.com\\\/peggy-head\\\/#\\\/schema\\\/person\\\/14fed8b1ae527666a4679c594dde7698\"},\"description\":\"B2B CFO\u00ae Partners possess the deep business experience, financial background and objective counsel to guide you along the way to make smart financial, strategic decisions that lead to sustainable growth\u2014and a healthy business! 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