How To Meet The Different Challenges Of Growing A Business?

Growing businesses face a number of challenges. As the business grows, the problems and opportunities that arise at various times in its life cycle require different solutions; sometimes, what was right a year ago is not the best approach now. If your business is to continue to grow and thrive, it is essential to recognize and overcome the common pitfalls associated with your business growth with the help of a business planning consultant. 

This guide highlights the special risks and common mistakes most likely to affect growing businesses and provides an outline of what you can do about them.

Staying Ahead in The Market

Market research is not a one-time affair. Business conditions are changing all the time, and so must your market research. Otherwise, you’re doomed to make decisions based on not up-to-date information—the recipe for 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 worse than average after a few months.

Loyal customers can quickly find alternative suppliers who offer a better deal. As products age, sales growth and profit margins diminish. Knowing where your products are on their life cycles can help you determine how to maximize overall profitability. At the same time, you have to invest in innovation to bring a large number of new, profitable products to market.

Planning Ahead

The plan that helped you make a profit a year ago may not be necessarily right for you now. Market conditions continually change, and you have to revisit and update your business plan regularly. As your business grows, your strategy must evolve to suit your circumstances. 

For example, your focus may shift from winning new customers to developing profitable relationships and maximizing growth with existing ones. Established business relationships can offer more scope for profit and usually offer steady cash flow, too. Newer relationships can boost turnover, but the profit margins might be lower and less viable over time. 

At the same time, every business owner must be alert to new opportunities. Relying solely on existing customers carries obvious risks. Diversifying your customer base spreads those risks. Following the same business model but more significant is not the only route to growth. Other strategic options, such as outsourcing or franchising, might provide better growth opportunities.

Cash Flow and Financial Management

Good cash flow control is important for any business, but it’s crucial for a growing business. Cash constraints can be the most significant factor limiting growth, and overtrading can be fatal. Making the most of your money has to be a part of the business plan and your review of new opportunities. If the resources are really scarce, you will just have to give up some quite attractive opportunities if acting on them will drain vital funds from your core business.

Each component of the working capital has to be kept under a tight rein if you are to maximize your free cash flow. Credit management must be good, and overdue debts must be firmly held in control. You could also use trade debts to raise finance. Reasonable stock control and effective supplier management tend to become increasingly important as businesses grow. Holdings of obsolete stock can become an issue that requires periodic clearing up. You may want to work with suppliers to decrease delivery cycles or switch to suppliers that can handle timely delivery.

Problem-solving

Many new businesses run in perpetual crisis mode. Each day brings new problems that must be resolved immediately, and most of management’s time is spent firefighting.

This approach won’t cut it as your business grows. While a short-term crisis is always urgent, it may not matter nearly as much compared to other things you could be doing. 

The soothing of an irritated customer will no doubt take up your time and might help protect that one relationship – but focusing instead on recruiting the right salesperson could lay the foundations of potential new sales for years to come.

The Right Systems

All businesses generate and need to use large amounts of information—financial records, details of dealings with customers and other business contacts, information about employees, regulatory requirements, and so on. Without the right systems, it may be difficult to keep track of—let alone use effectively.

While business owners can delegate responsibilities and tasks when it grow, doing so without solid management information systems in place is impossible. As your business continues to grow, it only becomes more challenging to ensure information is shared and different functions work effectively together. If you want your business to grow, then putting the right infrastructural foundation in place is part of that process.

Documentation, policies, and procedures also become increasingly important. The informality that may work with one or two employees and a limited number of customers simply isn’t practical in a growing business. You require proper contracts, clear terms & conditions, effective employment procedures, and so on.

Skills and Attitudes

Entrepreneurs are the driving force behind starting and growing new businesses. The skills that have enabled you to start up a business are not necessarily those that you will need to develop. It’s important not to delude yourself by overvaluing your own abilities. The chances are that you will need training to acquire the skills and attitudes required by someone leading growth.

To grow your business, you must learn to delegate properly, trust your management team, and give up the day-to-day control of every small detail. It is so easy to smother creativity and motivation with too much interference. As your business becomes more complicated, you must develop your time management skills, learning how to pay attention to what is really important.

Welcoming Change

A growing business faces a big threat from complacency. It is very foolish to assume that you will automatically remain successful in the future just because you have been in business in the past. Regularly reviewing and updating your business plan can help remind you of the changing market conditions and the need to respond to them. 

The Bottom Line

Be prepared to fully commit to your strategy, even if it means moving out of your comfort zone and changing suppliers to those who can grow with you and meet your new priorities. As your business grows and matures, consistent quality and reliability may be more important than simply getting the cheapest offer. 

Brava Consultancy can help you change the trajectory of your business. Their business strategy consulting teams have the skills to take clients through organization design that helps them create a lasting competitive advantage.