The “You Can Grow Too Fast” Formula

Here’s a weird little paradox: one of the easiest ways for a small business to fail is by being too successful. We know. It sounds crazy, but it’s true. In fact, we’ll even go out on a limb and say that business success is by far the most common reason that we see for business failure.

“Oh, right”, you say. “What are these guys on about?”

Let us explain. Whether you realise it or not, you need a certain amount of financial horsepower, or net worth, to do business. (Your net worth is just the difference between your assets and your liabilities.) You need to have some cash in the bank to tide you over the rough times that everybody has at least occasionally. You probably need to have some office furniture and computers so that you can take care of the business end of the business. And if you make anything at all, you need to have adequate tools and machinery. This part all makes sense, right?