Receive the latest mybusiness news
Copyright © 2020 MOMENTUMMEDIA

Your legal responsibilities when experiencing sudden growth

Jeremy Streten
17 July 2017 2 minute readShare
Know the rules

Fast growth is great for a business looking to scale and make its mark. It does, however, come with its own set of challenges for those leading the charge, writes Jeremy Streten.

Are you anticipating that a new product or service will greatly increase sales in your business? Are you confused or scared, wondering how you will handle this sudden growth?

Often the sudden growth will come after you find where your product or service sits within a market. When you grow your business, the problems that you had, whether they were known or unknown, will multiply as a result of the growth.


Often a business will exist with simply a founder and a few staff. At this point in time, the staff are usually a close-knit group of like-minded individuals. When you experience sudden growth, it is often necessary to hire more staff.

You need to ensure that you employ the right staff while maintaining your team culture. From a legal perspective, it is crucial to consider what you do to on board your new staff to indoctrinate them into your culture.

Also, you need to consider implementing rules relating to staff, i.e. what policies and procedures you have in place to maintain that culture. Policies and procedures set out your expectations as a boss and give employees written guidance on how to act and deal with problems in the business.

Intellectual property

It is common at this point that other business owners may seek to copy your business. The intellectual property in how you do what you do is the real value in your business.

Whether that is the process to create a product or how to perform a service, you need to consider how that intellectual property will be protected from unscrupulous competitors.

Protecting your intellectual property through either the registration of patents, trademarks or other means is designed to give you a commercial monopoly, for a period of time, over that intellectual property.

However, the process is costly and time-consuming. For this reason, you need to be pragmatic: don’t protect intellectual property for the sake of protecting it, but wait until you have a product that is worth protecting.

If you have not protected your intellectual property before you reach a stage of sudden growth, then this is the time to put the protections in place.


If your business requires capital to operate, you may need to consider bringing in investors or borrowing money to be able to cope with your sudden growth.

When you realise that you are about to or are experiencing sudden growth, you need to sit down with your advisors and work out the exact amount of money you are going to need.

Then work out how you are going to get that money. Can you afford to borrow the money? Are you willing to give up a portion of ownership in your business to bring in investors?

The temptation for business owners, who have experienced sudden growth, is to merely focus on getting the work done. Yet to ensure that growth is sustainable, you must work against that instinct.

At that point in your business, it is more important that you are working on your business to ensure that you are ready to expand.

Every business owner’s situation is different so make sure that if you are experiencing rapid growth, talk to your advisors and get the best advice to help you succeed.

Jeremy Streten is a lawyer and the author of The Business Legal Lifecycle.

Your legal responsibilities when experiencing sudden growth
mybusiness logo
Jeremy Streten

Leave a Comment

Latest poll

How satisfied are you with the SME measures in the federal budget?