What’s Stunting Your Business’s Growth?
Growth is the aim of almost every business out there. Capital attracts capital and, if you play your cards right, you can benefit from more profit, employ more people, and offer your services to those well beyond your original scope. But scaling is one of the hardest challenges new businesses face. So much so that it is the most common reason startups fail within two years. What are the stumbling blocks and warning signs they missed that you shouldn’t?
Preparation is key. That point might sound broad, but we’re talking preparing in the most practical terms possible: ensuring that you have the resources you need to cope with the costs of scaling a business. Where are you going to have to invest new capital? Do you need to hire more people, buy more equipment, or upsize the office? Are any new services you offer going to come with their own investments? Do your accounting in advance and try to inform your estimates with as much real data as you can get your hands on. You may find you need to take out a business loan to help you prepare, but scaling in debt is much better than trying to scale without enough funding.
Your team isn’t going to be able to effectively accommodate new tasks, responsibilities, and colleagues if they are already having trouble managing their current workload. Scaling is a period of upheaval. You have to ensure that your work practices are efficient enough that they can continue to be productive even when they don’t have the time and focus they normally would. Software like enterprise content management tools can help you upgrade your methods of creating and sharing documents, both internal and external, to make it better suit a growing team. You need to look at implementing the tools that will fit a bigger business with more users. Small business suites aren’t going to be enough to meet your needs.
You want to grow, but in what direction exactly should you be growing? The truth is that until you have some aim at the end of the scaling process, you shouldn’t attempt it. Could you offer a new service that helps you make your existing market more profitable? Perhaps it is time to expand your services to meet the needs of a new market. For some businesses, it’s as simple as opening a new location. If you’re uncertain which direction you should go, make use of market research firms to better understand the corners of the market still not being served. If you have successfully cornered your share of the existing market, finding a profitable niche can be the key to great future success.
Scaling isn’t easy, and growth isn’t always inherently positive. You have to make sure you’re prepared for the extra effort, the extra investment, and the period of transition that can trip up so many small business owners. Doing your research and streamlining the business as it currently stands can help you ensure that you’re ready for the challenge.