In a competitive market, every company must grow to survive.
But, growth can create new challenges that are tricky to navigate.
Limited resources, new customer segments, and shifting business goals require entrepreneurs and business owners to think on their feet and change how they run their business as it grows.
Here are the top 6 challenges of growing a business and how to overcome each challenge.
1. Recruiting employees and growing your workforce
A small business works best when it has the right team. It needs skilled workers to manage day-to-day operations.
When you start a business, your team is small. Just one or two people start most companies. And as a solopreneur, you must do everything. It’s your job to find a great business name for your new company, write a business plan, register the business, figure out a revenue model, create a strong brand identity by getting a memorable company logo, hire employees, and do everything else a young business needs.
There’s barely enough time to do all of those things.
As your company grows, so does the need for additional workers and an increased range of skills.
Effective businesses need to be good at recruiting the right talent and scaling their teams. These people will keep the company running and prepare it for future expansion.
It’s also vital to minimize turnover. Even if you can find skilled workers to join your team, your business may still struggle if employees decide to look elsewhere for employment.
Many small changes to business operations and culture can help reduce turnover. A comfortable office, good work-life balance, options like remote working, advancement opportunities, and training are good places to start.
Effective onboarding practices will integrate new employees into your business, help familiarize them with their role and make it easier to adapt to the company culture. Ensuring pay is competitive and offering the right benefits will make it easier to retain talented workers and grow your workforce.
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2. Keeping cash flow positive
A small-business owner needs to spend money to make money, and growth tends to open up new business opportunities that require additional expenses. However, sometimes you can spend too much and get into trouble.
Cash flow problems are one of the most common reasons small businesses fail. Keeping tight control over spending, cutting down on costs where possible, and securing any needed business financing will ensure you have cash on hand to deal with unexpected issues.
3. Attracting new customers
New customers are essential to business growth. It’s in your best interest to appeal to untapped audiences and target segments that can help your operations expand.
Knowing what your customers want will become more critical than ever. Market research, using techniques like focus groups, interviews, field tests, and surveys, will help you understand more about a potential audience. Soliciting feedback from existing customers can also help.
At the same time, you can’t afford to leave your current customers behind. Repeat customers are foundational to small-business success and tend to spend much more than new customers who may only buy from you once or twice before moving on. It’s 5 to 25 times less expensive to maintain relationships with current customers than to acquire new customers.
The customers you have already invested in are essential to future growth. Keeping them happy is good business practice and will ensure revenue stays steady as you pursue new audiences. Use the many available customer retention techniques to keep existing customers engaged.
4. Scaling up company culture
Preserving company culture as your business grows can be challenging. A tight-knit small business may start to take on a new character as it grows and more employees join the team.
Not everyone at work may speak to each other daily. You may have to learn how to integrate new employees into existing structures. Some workers may be remote or spend most of their time in the field — cutting them off from the rest of the team.
Fortunately, you can keep your small business’s excellent company culture as you grow with the right approach.
Tools that make it easy for employees to stay in touch with each other — like web conferencing and office chat — will help you facilitate team communication.
They’ll also help you, as an owner or manager, keep in touch with new hires and existing employees with whom you may no longer regularly communicate.
Digital office events and celebrations can also help. Staging regular office happy hours, digital training, and celebrations for significant holidays will provide a chance for employees to mingle, talk with each other, and share news. All team members will benefit, even if they don’t regularly come into the office.
5. Inventory and asset management
More customers mean additional sales — and increased inventory you have to store and move. Adopting the right inventory management solution will help you keep track of these resources as your business grows.
Even if your company doesn’t sell physical goods, you may still have to deal with asset management problems as your business grows. You may need to invest in a more extensive vehicle fleet or swap old computers for new ones.
Tools like telematics and GPS trackers will be handy for businesses with a vehicle fleet, such as trucking businesses. These devices let you track where trucks or cars are, how fast they’re going, and even what maintenance they may need.
6. Knowing when to delegate
Many small-business owners are tempted to do it all themselves — delegating as little work as possible.
This approach isn’t always practical, however, and it can become unworkable as your business grows. If you find yourself constantly beset by small, non-managerial tasks, you may not be spending enough time delegating work to others.
Good leaders know when they need help. They’ve learned how to tell if passing on work to an employee would be more efficient.
You don’t want to step back from your business entirely, and there will always be times when your judgment is necessary or when someone needs to be the decision-maker. However, as your company grows, you may find it better to delegate some work to others.
Preparing your business for growth
Growth is always good news for a business — but it can pose serious challenges you’ll need to navigate as an owner.
Preparing for your company to change, including its culture, team composition, and inventory needs, will help you when it goes through periods of expansion. These are the keys to success.
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