Growth is the sign of a healthy business. Growing profits, employing more staff and other exciting facets that come with growth. However, growing businesses face a range of new challenges. Different problems and opportunities demand different solutions. Recognising the challenges that can emerge with growth and catering for them is imperative if your business is to continue to thrive. Crucially, you need to ensure that the steps you take today build a solid foundation that decrease problems for the future. We have collated particular challenges that most commonly affect growing businesses and how your business may overcome them.
Knowing your Business’ Market
Market research is a continuous act. Business conditions are constantly changing, especially as your business grows. Stay informed by knowing who your competitors are and what they are doing – your business will need to be able to adapt as necessary. This will help your business set a competitive pricing strategy and your own marketing initiatives to combat competitors’ marketing campaigns.
In addition, your business needs to keep an eye out on where your product offering and services are in the current market in terms of their lifecycles. This will direct profitability and where you need to invest in innovation to create new offerings to the market.
As your business grows new customer segments may emerge too. Your business needs to build an up-to-date and in-depth picture of who your customers are, what they want, and how your marketing initiatives can best communicate to them.
Cashflow
It is vital to have good cashflow management, especially when funds may be tight. Effective credit management and control of overdue debts are essential. Making the best use of your finances should be a key element in business planning and when assessing new opportunities. With limited free cashflow, your business may need to consider passing up promising opportunities if pursuing them would put your business in jeopardy.
Good inventory stock control and effective supplier management become increasingly important as businesses grow. Obsolete inventory stock in the warehouse may become a problem that needs periodic clearing up. You may want to work with suppliers to reduce delivery cycles, or switch to suppliers and systems that can handle just-in-time delivery.
Having the Right Systems in Place
All businesses produce and rely on large amounts of information. From financial documents, customer interactions, employee information and so on. This data can become very difficult to manage – let alone use effectively – without the right systems. These tasks may be delegated as your business grows, but without solid information management systems, the less you can manage effectively and efficiently.
Putting the right systems in place is an essential part of helping your business to grow. Documentation, policies and procedures also become increasingly important. The informality that might have worked with few employees and a handful of customers is a hinderance in a growing business. Your business needs proper contracts, clear terms and conditions, effective employment procedures and so on. The best time to invest in these is when your business is growing, as to build a solid foundation to manage and streamline processes that exhibit best practices.
Hiring Talent
To grow your business, delegating properly is essential. When your business is growing, workloads can rapidly intensify. It is important staff are not too overloaded, and that more people are employed to cover the additional work coming in. Keeping in mind it is just as important that your business hires the right people. This is so that as a business owner, you can put your trust in your management team and giving up day-to-day control of every detail – as not to stump creativity and motivation with excessive interference. As the business becomes more complex, business owners also need to develop time management skills and learn to focus on what is really important. Sometimes the aid of outside help is advantageous, especially when you recognise your own limitations and aid further growth as a result.
Fostering Change
Complacency can be a major threat to a growing business. To overcome this, regularly revisiting and updating your business plan can help remind your business of the changing market conditions and the need to respond to them. This helps identify crucial aspects of your business such as:
- Ensuring suppliers can grow with your business and meet new priorities.
- Renegotiating contracts to take account of increased volume.
- Training and developing employees.
- Making sure that your business keeps up to date with new technologies and innovation.
It is important to be committed to your strategy, and it may take business owners out of their comfort zones. Growth inherently faces business owners with difficult decisions. These can come in the form of making employees redundant or changing suppliers that they have a good working relationship with, because they simply cannot keep up with your growth. It is important to note these as decisions in the growth part of business can help your business or serve as a costly detriment.
