Too many roles - not enough time
Many business owners have a long term goal to grow their company over its lifetime. A growing business tends to mean more cash flow, more job creation, more opportunities for passive income for the owner and a more sellable business at the end of your journey with it.
But we all know there are many obstacles to business growth. If it was that straightforward, everyone would be doing it! In this blog, we’ve listed five common factors which limit business growth in SMEs and some ways that you can overcome them.
1 - Financial Management
One of the first obstacles to business growth you are likely to run into when growing your business is cash flow management.
A lot of business owners hear the phrase “you’ve got to spend money to make money”, and this can very quickly get out of hand and become a limiting factor to your growth.
It’s crucial that during this period of growth, you identify your primary channels of income and work to maximise production in those areas to provide your company with the capital it needs to expand.
If you fall at this first hurdle, it makes growing any further almost impossible, as it puts the whole company at risk.
This means robust financial controls are needed. Just working with your accountant annually and only periodically ‘checking in’ on your debtors is not enough. What you need instead is:
- Regular, reviewed and strategic management reports
- Debtor management is systemised
- Cashflow is forecasted and monitored
- Individual profit centres analysed with their own targets.
These measures in their own right frequently make business ‘grow’ without any actual changes to the volume of sales. They also empower you to make informed financial decisions about further investments for growth such research & development, product diversification, recruitment, acquisitions etc.
2 - Company Culture
It’s entirely possible that as your business grows, the day to day running will change quite drastically. But unfortunately, many small business owners fail to realise just how important it is to establish a company culture that their employees are aligned with. A lack of defined business culture is our second obstacle to business growth.
If you don’t have some agreed guidelines from the start, it’s very easy for team members that joined initially to feel like the company is changing too much, and they can begin to feel alienated when new members join.
It’s crucial that you establish the kind of ‘dream culture’ you want to nurture in your company from the beginning so that you can hire people who are aligned with the same goals as you.
It’s also a good idea to make your team and new prospective hires aware of these company culture guidelines so that they aren’t just an idea but a visible code of conduct. This helps ensure that the whole team is on the same page and working towards the same goals.
As a consequence, team management and performance is often better – meaning you get more from your team and therefore more for your business.
3 - Planning your supply chain and fulfilment
As your business grows, you will likely need to scale up your supply chain capabilities. If your business grows without the proper planning, you could end up in a very sticky situation, without the ability to fulfil orders or provide your services. Have the orders and demand but the ability to deliver, which is damaging for your brand reputation, team morale and much more!
This is where it’s vital to have planned before you begin to grow and constantly look ahead and forecast how further growth could affect your business. It’s a great idea to communicate with various suppliers in case one is more capable of fulfilling your needs as you grow.
Systemisation of your operation can also overcome this obstacle to business growth. It ensures a consistent process, understood by everyone (so long as there is proper training). It also allows for automation of some of the tasks, therefore your team’s time to handle the increased demand.
4 - Use tools that are scalable
There’s a high chance the software and equipment you started with is no longer going to cut it as your business grows. For example, perhaps your CRM software only allows a few logins at one time, your IT equipment is simply out of date, or your customer service support team don’t have enough headsets to go around.
The best way to avoid running into this problem is, much like before, to have a plan in place before beginning to upscale. You must take the time needed to properly consider your current needs and work out what they are likely to become in the future as you grow.
It’s much better to be prepared for the future than scrambling to try and become efficient in the present.
5 - Be aware of your changing competition
There will always be competition in business. That’s simply the free market at work. However, as your business grows, you may start to enter the sphere of new competitors, often ones that are already further down their path than you are.
Of course, you should be doing everything possible to retain your current clients, but this position also allows you to find out what these larger companies are doing well and what they aren’t doing so well.
With this knowledge, you can strategically position yourself to take advantage of their downfalls and enter this new market as a force to be reckoned with.
It’s important to understand that there will always be a bigger fish and a smaller fish trying to do what you do, but better! So you constantly need to be watching the market and ensuring you are offering the best service possible.
Removing the obstacles to business growth with a business coach
These are just some of the common obstacles to business growth, which we find crop up again and again among the businesses we speak with.
As business coaches, we aim to help people achieve their business goals, and we advise on all aspects of company growth. The single most important piece of advice we’d offer though is to plan and look strategically at your business.
It is very easy as a business owner to focus on the day-to-day operations and sales leads. But growth which is sustainable, and one where you reap the benefits rather than just adding more stress to your plate, has a plan behind it.
Have a clear vision for what that growth looks like, why you want it and what it should achieve for your business. Then consider the implications of that for your culture, teams, operations, products or service, supply chain and systems. We’ve discussed in a previous blog what goes into a Business Growth Plan.
Not having one that considers the five pitfalls above, and more is the single biggest factor limiting business growth in our opinion.
Explore our website to find out more about how a business growth coach would enable your business ambitions to become reality or book a complimentary business review to discuss the needs of your business today.
