New business – Mistake № 2 “Death of a motorcyclist”

“Death of a motorcyclist” is a typical situation for small, high growth companies which prefer aggressive politics. This happens quite often, because aggressive marketing is priority-driven for small enterprises.

Getting credits and pre-payments, company increases the turnover quite fast. But even pre-payments does not solve the problem of high and unpredictable expenses. Any businessman known that it is very hard to foresee the money outflow.

There always are some unpleasant surprises: salaries, feedstock payments, taxes, extra charges and outgoings. And when the enterprise is only growing, these unplanned expenses  can suffocate it (also happens, when the  work is not intensive)

Marketing specialists  say that 20% a year increase is maximum. Of course this numbers depend much on the country, period and field of activity and can vary. But if the growth is much more than 20%, then the company is like a motorcycle with speed more than 80 km\h.

It is very hard to control this motorcycle, and even a small stone under wheel can lead to a catastrophe

In this case the growth should be limited: easy does it.  

In the business that we offer it is possible to count all the expenses and work out a long-term  business plan, foreseeing all the perspectives of the company

Back to “perspective business”

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