101: Overnight Success
The idea of being too successful doesn’t sound like much of a problem, does it? But surprisingly, success can be a major factor for a company’s undoing.
When it comes to overnight success, most business owners yearn for it, but more often than not, they don’t have a plan ready to handle the new challenges that come along with it. The following advice from Rosalind Resnick of entrepreneur.com can serve as your emergency plan for dealing with overnight success.
Keep it in perspective. Your new-found success will not lead to immediate financial dividends, so curb spending and frivolous purchases.
“While it’s only natural to want to celebrate the good news, remember that a big contract or great press doesn’t mean dollars in your bank account — at least, not today,” Resnick says. “So hold off on that Ferrari or tropical vacation.”
Cover your bases. An overnight demand for your product or service will likely require additional manpower; but keep in mind you need to compensate those new members of your workforce.
“Employees and manufacturers generally won’t wait until you’ve sold the products and collected the money before you pay them,” she says. “If you’ve got an existing business with good credit, your first call should be to your bank to set up a credit line or increase the one you have.”
Err on the side of caution. While you may need to bolster your staff, look to grow your workforce at a conservative pace.
“Your overnight success may not last forever, so don’t commit to hiring full-time employees with payroll taxes and benefits until you’re sure your company’s good fortune is here to stay,” Resnick says.
Invest wisely. Once the money starts coming in, remember to put some of it back into what brought it there in the first place.
“While it may be tempting to reap the profits from your hit products right away, it’s important to reinvest some of those profits to help your business grow,” she says. “It’s always cheaper to put your own cash to work in your business than to borrow money from a bank or give up equity to an investor.”
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