A successful business is every entrepreneur’s dream. However, growth often comes with challenges that may put a strain on the business. In this article, we examine some of the most common growing business pains small businesses encounter. We will also look at innovative solutions to counter these challenges.
An expanding business requires more employees because of increasing job tasks. Getting the right people to fit into the new roles ensures your business success. However, recruitment, training, and development can be a pain for a small business. Not only does it put a strain on your resources but also consumes a lot of time that can be spent more productively
Poor Cash Flow
When your business is still growing, it is often difficult to accurately project revenue versus expenditure in a given month. This could result in cash flow constraints that cause difficulty meeting payroll, paying suppliers, and other crucial financial obligations. In some instances, your sales may be increasing but your profits are remaining unchanged or even declining. This happens when your product or service is underpriced.
Poor Strategic Planning and System Development
Due to lack of business experience, a lot of small businesses rely on ‘putting out fires’ as a business strategy. The systems that create a successful business take the time to develop. The resources for research and development are often not available at this stage, exposing small businesses to badly informed strategies.
Because of constantly shifting demands, small business employees often have unclear job descriptions. They may have to perform any task that arises in the course of duty. This often causes low staff morale, physical, mental and emotional burnout. During the initial growth phases of a small business, it is not uncommon to have a high employee absenteeism and turnover. The lack of organizational structure also means that necessary action plans may not be implemented due to a lack of a clear chain of command.
Changing Business Goals and Objectives
A shifting business landscape means constantly adjusting your business goals. At some point, however, it is possible to lose track of your core business objectives. While adapting to new trends and market demands is healthy, small business entrepreneurs often find themselves pushed into products and services they cannot sustain.
When you are busy ‘putting out fires,’ you often miss business opportunities that could take your small business to the next level. Sometimes, the proverbial opportunity of a lifetime may pass you by because you haven’t built the capacity to pursue it. Other times, you may not be able to identify such opportunities on time.
Overly Optimistic Goals
Small business owners often set unrealistic sales projections or business objectives. As the business grows, these inflated sales revenues fail to be achieved, creating a cash crunch. Also, employees with unrealistic sales targets may experience burnout.
When demand for your products increases, you will need to increase your inventory to ensure your customers’ needs are met. This could cause some storage challenges if you did not project such rapid growth. You may even have to rent or buy storage units to store excess stock, supplies or equipment.
How to Navigate Small Business Growing Pains
Growing pains signify a need for change. As a small business owner, you have to be objective enough to address the challenges that come with your growing business. A few ideas for remedying the above challenges include:
Your employees need to be clear on company objectives and strategies in order to serve your customers better. Creating open channels of communication across all levels of the company can improve staff morale and help keep everyone on the same page.
Adequate Market Research
If you are in a relatively common business niche, doing some research helps you make sound business decisions. Using free or analytics tools that predict market trends can help you plan and scale your business growth.
Scale your Expansion
For your business to be successful, it should transition through the different growth phases systematically. This means resisting the temptation to scale your operations drastically to meet market demands. Scaling your business slowly gives you time to build experience and build capacity for growth at a comfortable pace.
Being ready to adapt to the customers’ needs allows your business room to grow and remain sustainable in an ever-changing market.
Planning and preparing for growth and expansion will help you anticipate and handle growing pains with ease.