Do you have ambitions to grow your business? To build a business beyond you, a legacy, a great business, creating the life you want without any sacrifice? Business often starts being simple and as you grow things can get really complicated.
We find that growing businesses face a range of challenges. As a business grows, different problems and opportunities demand different solutions – what worked before may not be the best approach now.
Recognising and overcoming common pitfalls associated with growth is essential if your business is to continue to grow and thrive. Crucially, you need to ensure that the steps you take today do not themselves create additional problems for the future.
Here are some of the problems we have experienced. Do any of them resonate with you?
- Keeping up with the market
- Planning ahead
- Cash flow
- Problem solving
- The right systems
- Skills and attitudes
- Accepting change
We partner with lots of different types of businesses, at different stages of the growth cycle. We understand that every business has different needs, as they are at different stages and in different sectors. With time to understand more about these problems business owners could ensure they protect their businesses for the future.
Keeping up with the market
Market research is not something you do as a one-off when you launch your business. Business conditions change continually, so your market research should be continuous as well. Otherwise, you run the risk of making business decisions based on out-of-date information, which can lead to business failure.
The more you succeed, the more competitors notice – and react to – what you are doing. A market-leading offer one day may be no better than average a few months later.
You should be able to build up an in-depth picture of what customers want, how they behave and which of your marketing approaches work best.
Taking the time to talk to key customers and carrying out extra research pays off. Take time to test customer reaction to a new service. You might do this yourself or use a marketing freelancer or agency.
The plan that made sense for you a year ago isn’t necessarily right for you now. Market conditions continually change, so you need to revisit and update your business plan regularly.
As your business grows, your strategy needs to evolve to suit your changed circumstances. For example, your focus will change from winning new customers to building profitable relationships and maximising growth with existing customers.
At the same time, every business needs to be alert to new opportunities. There are obvious risks to relying solely on existing customers. Diversifying your customer base spreads those risks.
Following the same business model, but bigger, is not the only route to growth. There are other strategic options such as growing your business by outsourcing.
Bear in mind that every new idea brings with it changing risks. It’s worth regularly reviewing the risks you face and developing contingency plans.
Good cash flow control is important for any business. For a growing business, it’s crucial – cash constraints can be the biggest factor limiting growth.
Making the best use of your finances should be a key element in business planning and assessing new opportunities. With limited resources, you may need to pass up promising opportunities if pursuing them would mean starving your core business of essential funding.
Every element of working capital should be carefully controlled to maximise your free cash flow. Effective credit management and tight control of overdue debts are essential.
New businesses often run-in continual crisis mode. Every day brings new challenges that urgently need resolving and business owners spend most of their time troubleshooting.
As your business grows, this approach simply does not work. While a short-term crisis is always urgent, it may not matter nearly as much as other things you could be doing. Spending your time soothing an irritated customer might help protect that one relationship – but focusing instead on recruiting the right salesperson could lay the foundations of substantial new sales for years to come
As your business grows, you also need to be alert to new problems and priorities. For example, your business might be increasingly at risk unless you take steps to ensure your intellectual property is properly protected.
The right systems
All businesses produce and rely on information – interactions with customers, business contacts, financial records and so on. It is too much to keep track of – let alone use effectively – without the right systems.
Responsibilities and tasks can be delegated as your business grows, but without solid management information systems you cannot manage effectively. The larger your business grows, the harder it is to ensure that information is shared. Putting the right infrastructure in place is an essential part of helping your business to grow.
Documentation, policies, and procedures also become increasingly important. The informality works with one team member and a handful of customers simply isn’t practical in a growing business. You need proper contracts, clear terms and conditions, effective team procedures and so on.
Investing in the right systems is an investment that will pay off both short and long term. You benefit every day from more effective operations. If you ever decide to sell the business, demonstrating that you have well-run, efficient systems will be an important part of proving its value.
Skills and attitudes
Business owners are the driving force behind creating and growing new businesses. All too often, they are also the people holding them back.
The abilities that can help you launch a business are not the same as those you need to help it grow. It’s vital not to fool yourself into valuing your own abilities too highly. The chances are that you’ll need training to learn the skills and attitudes required by someone who is leading growth.
To grow your business, you need to learn to delegate properly, trusting your management team and giving up day-to-day control of every detail. It’s all too easy to stifle creativity and motivation with excessive interference. As the business becomes more complex, you also need to develop your time management skills and learn to focus on what’s really important.
Complacency can be a major threat to a growing business. Just assuming that you will continue to be successful simply because you have been in the past is very unwise.
Regularly revisiting and updating your business plan can help remind you of the changing market conditions and the need to respond to them.
An up-to-date plan helps you identify what action you need to take to change your business and the way it operates.
You need to be fully committed to your strategy, even if it takes you out of your comfort zone. This may involve hard decisions. Unless you are prepared to do this, you risk putting your business at a dangerous competitive disadvantage.
Do you need some help beating your businesses growing pains?
It costs nothing to have a chat. Tell us where you need help, it may be in areas of your business that you could outsource, freeing up time, easing your cash-flow and possibly solving your growth problems all-in-one.