Don’t let your business run away from you

For a start-up or a young company, early exponential growth may seem like the Holy Grail and can be a sure-fire path to success. However, entrepreneurs may find that very rapid growth can be practically impossible to sustain and can even kill a company. Amazingly, of the Sunday Times Fast Track 100 list of the fastest-growing small companies of 2000-2001, only 47% are still in business today, with most of them going into administration or having been acquired.

Rapid growth and expansion means rapid change. Your small company’s initial success may well be based on little more than creative excellence, a great idea and the hard-work and energy to see it all through, combined with the extremely low overheads of a seedling company. Once the business begins to grow, you may need to hire new people who don’t have the same vested interest in the company and may not be a strong enough foundation upon which to build an exciting but somewhat fragile young company. The speed at which the infrastructure of the company is built must be in keeping with the speed of its expansion. Acquiring debt in order to fuel further expansion may seem like a smart move, but is a risky move that can backfire if the company falls on difficult times. Like a child going through a growth spurt, there will be growing pains and it is vitally important that you pay very close attention to sustaining good business practice and keeping control, even during the exciting boom phase.

The idea of managing and organizing a rapidly-expanding company may be extremely daunting, but there are plenty of examples of entrepreneurs who have been able to manage growth expertly and keep it at a sustainable level, even in economies experiencing their own exponential growth. Tunde Folawiyo, CEO of the Yinka Folawiyo group in Nigeria, is a perfect example. The economy of Nigeria has expanded almost overnight to overtake South Africa and become the leading economy in Africa, and the success of Folawiyo’s group mirrors Nigeria’s own growth. Nigeria’s economy has diversified to become far less reliant upon the petrochemical industry, and the Yinka Folawiyo group, formerly specializing in the oil and gas industry itself, has also diversified: the Bloomberg BusinessWeek page for Tunde Folawiyo lists a massive range of investments and strategic enterprises including logistics, agriculture, banking, education, advertising and telecommunications.

This rapid expansion and diversification could have easily led to the company running away from its owner. However, Folawiyo put a particular emphasis on imprinting his own business ideology on his acquisitions while finding the right people to take his businesses forward. As a wholehearted proponent of African leadership and a leading player in the Nigerian business community, Folawiyo himself is an immensely popular public figure that uses his profile to encourage youth development. He has embarked on a number of philanthropic projects to find and employ the African leaders of tomorrow who share his dynamism, ethos and ambition. If your company has a sound, working blueprint and can also employ people who share your own ethos, then your company won’t run away with you and your initial success will be carried on for years to come.