Why Growing Too Fast Could Kill Your Exit?

Welcome back to another edition of The Wise Exit!

In today's issue, we're covering:

1. Why Growing Too Fast Could Kill Your Exit

2. How to Sell a Franchise

3. The Hidden Metric That Makes or Breaks Your Sale

Let's dive in!

Why Growing Too Fast Could Kill Your Exit

Rapid growth can actually wreck your exit potential.

It's counterintuitive, but those impressive "hockey stick" growth charts that excite investors? They often terrify serious buyers.

Consider a manufacturing business that tripled revenue in 18 months.

Sounds great, right? Until you spot the cracks:

• Quality control slipping

• Key employees burning out

• Customer complaints piling up.

The foundation is crumbling under the weight of that growth.

And sophisticated buyers see these red flags clearly.

Because they're not just buying your current revenue.

They're buying your ability to sustain and build upon it.

Here are 5 growth-related deal killers to be aware of:

1. Operations falling behind sales: Your team is scrambling, mistakes multiply, and buyers see a business that's one big contract away from collapsing.

2. Cash flow problems despite strong revenue: Growth consumes cash, and many "successful" businesses go bankrupt during rapid expansion.

3. Rising customer churn masked by new acquisitions: You're on a costly treadmill, spending more to replace customers than to keep them.

4. Core processes breaking under scale: Manual systems that worked at $1M completely break at $10M, creating chaos buyers won't touch.

5. Cultural erosion as teams expand: Rapid hiring dilutes your culture, leading to mounting HR issues that make buyers nervous.

The solution? It isn't to stop growing. It's to grow sustainably.

Here's how:

• Invest in systems before they break, not after

• Keep customer retention as your north-star metric

• Grow your leadership team ahead of revenue needs

• Maintain healthy cash reserves even during growth periods

• Build a scalable culture through documented processes and values

Remember, a sustainable business that can grow predictably is worth far more than one that's growing too fast to control.

Featured Blog 📰

Thinking about selling your franchise?

Our latest blog breaks down the exact steps you need for a successful exit.

We cover:

• Critical documents you need to prepare

• Key legal considerations you can't ignore

• Essential steps to find and vet potential buyers

• How to work with your franchisor during the sale

Check out "How to Sell a Franchise: Steps, Tips & Legal Considerations" on our blog.

M&A Tips from Brian Dukes 💡

Forget about revenue. Here's what buyers actually care about:

Churn.

Because your lost customers will make or break your business' valuation.

Founders love to brag about growth rates and showcase hockey stick revenue charts. Everyone looks impressed... until someone asks about their churn rate.

Read the full post on LinkedIn.

That's all for this week!

Best,

Brian Dukes