Why do some businesses struggle so much to get off the ground? Or, when they eventually gain some momentum, they plateau and fail to sustain any growth?
The first years for any business can be testing, draining, and exhausting. Seasoned entrepreneurs as well new business owners face innumerable challenges with growth. When a plateau hits, the knee-jerk reaction can be to get aggressive with marketing, sales and recruitment (or redundancies) just to try and get things moving again as fast as possible.But a more strategic look at how the business is operating will help you identify underlying problems that could be hampering your bottom line.
Let's take a look at 6 common challenges, known for impeding business growth, and how they can be overcome.
1) Founder dependence
It sounds ironic. Of course a business will be heavily dependent on the founder -at least to some extent.
But while most founders are incredible leaders and entrepreneurs, they struggle with art of delegation. They become precious about their responsibilities and reluctant to share the load for fear that others might not be able to perform tasks as proficiently. Sound familiar?
Whether you recognise this trait in yourself or a colleague, delegation is a vital tool that can prevent mental burnout, physical exhaustion, and stunted business growth. It allows you time to nurture strengths, channelling them back into the business and having the headspace to identify opportunities for growth. Business cannot grind to a halt because its founder has taken a much needed clarity break and logged our for a few days. Remember the adage: 'Work on your business, not in your business!'
What's more, that extra headspace enables a founder the time to step back and take an objective look at the business. Where are your talents needed most? Business development? Customer service and sales? Marketing?
Once your own capabilities are allocated efficiently, gaps can be filled with a focus on hiring competent and skilled individuals.
2) Cashflow
Cashflow is a fundamental short-term funding solution for businesses. For small business and start-ups, however, it can be difficult to come by the volumes of cash needed to continue funding your growth. It’s not uncommon for new business owners to forgo other financial luxuries (such as a moderate salary) in order to propel their business.
If cash is becoming tight, we suggest setting up a cash flow forecast to identify where you can cut back and make savings.
It’s important not to starve the core business of necessary funding by overpromising and overtrading too early on. Perhaps you can order less stock from suppliers, or postpone costly expansion plans. Anything you can do to accumulate extra cash in the short term could save the business from financial ruin.
3) Lack of strategic planning
A lack of strategic direction will likely lead to one of two outcomes: stagnation or failure.
How can you be sure you’re headed towards sustainable growth if you don’t have a clear plan and a set of achievable goals?
Establishing where you want to be in the short, medium and long-term means you can put the correct procedures in place to work towards each goal. In doing so, you can mitigate risks and reduce the chance of further obstacles.
Steady, manageable growth is, after all, the key to sustainability. Your strategic plan should be nimble, yet focused and achievable.
4) Poor recruitment processes
All too often, recruitment doesn’t get the attention it deserves. A recruitment strategy should be focused and defined, not nebulous and irrational.
Depending on the nature of your business and the skills you’re looking to obtain, this demands an investment of time. An inadequate recruitment strategy coupled with poor judgement of character can prove costly - both financially and culturally.
One wrong fit and the entire dynamic of a business can be compromised, impeding on growth and often putting sustainability in jeopardy. High staff turnover can also be detrimental to reputation, another impediment to business growth. So, take care with this one.
5) Risk averseness
Being risk averse is ingrained into many of us by nature. As humans, we seek comfort and familiarity, and avoid anything likely to result in danger.
Ironically, entrepreneurs tend to be risk takers, but when things start to settle it’s easy to become complacent and avoid the risk of losing your steady and sustainable income.
However, the landscape in which we operate is very volatile, and one cannot fear change. Taking calculated risks is one way to help stimulate business growth, but take care to assess the cost of that risk. Taking too much of a risk could result in failure while being too risk-averse could hinder your growth.
6) Inadequate marketing activity
Marketing gets a bad rep, but when done correctly, it could be the difference between administration and global success.
And that’s not just the volume of marketing activity, but the quality and effectiveness of that marketing activity.
Yes, you might invest in marketing, but are you using the right platform and targeting the right people?
If you take the time to establish the habits, preferences and values of your ideal customer, you’ll be in a better position to ascertain which channels are better suited to target them.
For example, you might focus all of your efforts on billboard campaigns, when your ideal customer is riding the tube every day.
Marketing is the fuel that drives business towards exposure and sales, so invest wisely. Do you have the budget to employ a professional or partner with an agency? Often some external perspective can be the game changer you need to find new avenues of exposure that thrust your brand in front of the right people, at the right time.
Perhaps some, if not all of these challenges resonate with you on some level. Businesses require nurture and investment, but at the same time, it’s important to stay focused and aware. Losing sight of your end goal, and working in rather than on your business is a mistake all too many leaders fall foul of.
