The financial aspects of overextension can be very sad. Taking out a loan for a product or service that has not been tested is unnecessary and it can easily lead to bankruptcy. Read 7 famous people who survived bankruptcy.
The key is to make sure your business has steady customers before you expand. Even Facebook had plenty of users before they took out large loans. You can also expand slowly instead of taking out a loan for $1 million. A business adviser encouraged me to take out a loan for $50,000 for my business since it is challenging to get a smaller loan. I obviously didn’t take on that debt, because I believe it is smarter to start extremely small and experience first hand what the demand is for my idea. I have been busy and plan to expand slowly over the next five years. If the demand for my idea dramatically increases, I may take on some debt. I would take on a small amount of debt at this point because my idea will be tested and I will know the demand for my business.
This also holds true for marketing your product or service. If you have to turn many people down because of your great marketing, scale back on your advertisements. It will harm you more in the long run if you can’t keep up with the demands of your customers. Increase your advertising as you increase the number of products and employees you have. Unsatisfied customers can be the worst form of marketing. “If someone has a lousy experience at your hands, they will warn people.” (-Richard Branson) Keep your customers satisfied and they will say good things about you, which will allow you to grow slowly, but surely.
Read Seth Godin’s blog post about overextending yourself, titled ‘Underextended.’ I agree with his point about pushing yourself to the limit during your work day and to avoid doing too little in response to the fear of overextending yourself, but I still believe that it’s unnecessary to get involved with four completely different projects aside from your business if you are unable to delegate. Not pushing yourself to improve your business because of the fear of overextending yourself definitely can be more damaging than doing too much. You will miss out on opportunities that could have led to an amazing future and terrific financial gains. But if you do miss out on these opportunities, you still will not have debt because you didn’t take them on. You will simply have a missed opportunity. If you overextend yourself, you may have debt in the hope of customers. When you really analyze it, overextending yourself is still more lethal than underextending yourself. Just be careful not to underextend yourself so much that you never take on ANY opportunities!
Give 100% at your job or with 1-2 of your projects each day. For example, focusing your energy on school and work during the day can be balanced while maintaining great performances. When you’re focusing on school, a job, sports, music, a part time business idea, and another part time job, you will be overwhelmed and you obviously won’t be able to give each endeavor the attention is deserves.