It’s a question every small business owner has to wrestle with: How fast should I be growing my business? Look at Amazon.com for example. Jeff Bezos founded it in 1994, and in 2015 it surpassed Walmart as the most valuable retailer. Compare that to American Apparel, which was exploding in the retail industry only eight years ago with stores in over 20 countries, and this year filed for bankruptcy. How can we know how much growth is too much? After 11 years of growing Hint Water, my own business, I have come to realize that how a business paces itself can be a make or break decision. I’ve found that smart growth all comes down to finding that perfect balance of risk and precaution.
Avoid Rushing to Market.
Here’s Why… So you have a great concept that you’re passionate about, and you’re dying to share it with the world. That’s great! But don’t let that drive go into overdrive—it could cost you your entire business. Here are some ways to take healthy precautions:
Do Your Market Research Homework
One thing I always say is that you want your customers to feel like they’re discovering you; it creates a feeling of exclusivity and strengthens your unique relationship with the consumer. But how can you do that when your marketing strategy is to constantly blast your logo all over everything? No one likes that kind of person in real life, and the same is true of how people will view your business. Be strategic, be focused, and pace out your process. Research what your consumers like to do, where they go, and what their interests are, and then use that information to target your market effectively. That selectivity will ultimately attract a healthy stream of customers who are far more likely to stay loyal to your brand. Sloppy, ubiquitous marketing is like drinking a soda: it’s great for the short term, but eventually you’re almost guaranteed to crash. If you plan on sticking around for the long term, take a measured approach; invest the time at the front end to plan out your marketing path and ensure your company’s longevity.
Slow Down—Manufacturers Ahead
One of the most important aspects of successfully getting your product out into the world is thoroughly researching manufacturers. This is true for a few reasons:
The most obvious reason is that your manufacturer is creating your product! If you really believe that what you’re offering to the market is exceptional, then don’t entrust it to just anybody. Make sure it’s being produced by someone who really gets what you’re doing and is willing to put in the work to ensure it comes out perfect every time.
Another thing to think about here is that the integrity of your brand is going to be associated with the practices of your manufacturer. Take the time to find out how they treat their employees, what their environmental practices are, and what their business reputation is like. It may seem like a laborious process, but in the long run it will ensure the safety of your brand—and that’s well worth the wait.
This is a relationship that you will (hopefully) be in for years, and just like any relationship, it’s crucial to make sure you know what you’re getting yourself into. If you see any signs of underhanded behavior, or if it just doesn’t feel right in your gut, don’t push through just because you want to put your product out there as soon as possible. Trust that intuition, and keep looking. Believe me, it’s time well spent in the big picture.
Balance Precaution with Risk.
Having a measured approach has to be weighed against consistent growth. Taking risks is part of the game; no company ever found success by playing it safe every time. On some level, every decision is a risk and you have to be willing to take that leap—as long as it’s balanced with healthy precaution. Here’s what that looks like:
At Hint, we recently decided to take on a direct-to-consumer business model and have now started making our products available for customer purchase online. This move has really paid off. It was a risk though—it could have gone either way. But before we launched the initiative, I took some time to research. I looked into how the people who make up one of our biggest targets—Millenials—are spending their money, and what I found is that they’re spending less on products in grocery stores and instead choosing to have products delivered to their door, whether via Amazon, Diapers.com, or direct manufacturers.
I’ve talked about this with other business owners, and I know some of them have decided this direct approach is a risk they’re not willing to take. My feeling is that they’re really missing the boat. The new generation of consumers isn’t going to the grocery store or to the mall—they have busy lives and are prioritizing convenience. I know that because I’ve done my homework, studied the data, and seen the market trend. I’m willing to take the risk because it’s not a rash risk—it’s an educated one.
By finding this happy medium between being careful and taking risks, I believe companies will be able to stay safe in the long run while also making major strides.
Kara Goldin is Founder and CEO of Hint Water, the fastest growing flavored water in the United States. Previously Kara was Vice President – E-Commerce and Shopping at AOL. Ms. Goldin has been a contributor to The Wall Street Journal, The New York Times, The Huffington Post, Forbes.com, Reuters, BusinessWeek, CNBC and Fox News. She was selected as one of Fortune’s 2011 “Most Powerful Women Entrepreneurs,” and in 2012 as one of Ernst and Young’s “Entrepreneurial Winning Women.” She was honored with the 2012 Gold Stevie Award Winner for “Female Entrepreneur of the Year” & was listed as a “CEO to Watch in 2013” by OpenForum.com. Recently, Forbes named her as one of the “40 Women to Watch Over 40.” Follow Kara on Twitter.