Most entrepreneurs, by nature, have a higher-than-normal tolerance for risk. And their success often comes from embracing it when those around them are too timid to do so.
But it’s possible for entrepreneurs to be too comfortable with risk. In fact, this comfort can lead to their company’s downfall.
At least, that’s what Robert Sher thinks. In his new book Mighty Midsized Companies: How Leaders Overcome 7 Silent Growth Killers, Sher (a veteran entrepreneur and consultant who specializes in coaching executives in growing businesses) argues that risk can easily lead to recklessness, and that can greatly diminish a firm’s growth potential—especially when it comes to finances.
“It’s tempting for executives at midsized companies to believe that the only time they can run out of cash is when revenue is falling off a cliff,” Sher writes. “On the contrary, fast-growing midsized firms are just as susceptible to running out of cash as companies with declining revenue, perhaps even more so. Simply put, they can spend too much too fast, or spend too little too late. It’s like a driver pulling into oncoming traffic to pass on a two-lane road: misjudging distance and speed can be fatal.”
Unless management is able to accurately assess the speed with which expenses and revenue will grow over time, Sher continues, “a midsized company gunning for growth faces the prospect of running out of money and all its ugly consequences, such as being forced to pull back on new product development or slash the sales force.”
In short, reckless planning and/or spending can kill a midsized business’s expansion plans. Furthermore, it’s not the only thing that can do it; Sher has identified six more fatal errors the leaders of growing companies make too often. And on September 29th, he’ll present all seven of his “silent growth killers” at the PROFIT Growth Summit in Toronto.
Sher’s keynote address will kick off a morning-long event that will also feature a panel discussion in which the leaders of Toronto’s Fastest-Growing Companies discuss the strategies and tactics they use to overcome some of the biggest challenges that come with fast growth. The event will wrap up with a must-see conversation in which Harley Finkelstein of Shopify will interview soon-to-be Dragons’ Den star Mike Wekerle of Difference Capital about what it takes to be a successful entrepreneur today. In between will be networking breaks and other informative sessions meant to help you build a better business. You can see the full agenda and speaker biographies here.