How to avoid the common pitfalls of a growing business
Whether you’re an entrepreneur or the head of a successful startup, you’ll likely have the growth of your business in your sights. As you look to increase revenue, expand your business’ offerings and grow and develop your team, be mindful that a growing business does come with its unique set of challenges, risks and drawbacks. The following insights should help you navigate and sidestep the more common pitfalls related to business growth.
YOU’LL NEED TO KNOW HOW TO SCALE YOUR BUSINESS PROPERLY BEFORE INVESTING IN GROWTH
According to one Entrepreneur blog, there’s a big difference between growing to be market – or product – fit and scaling up a business. You should only really start thinking about expanding your business’ services or product offerings once you’ve established good traction with your existing client base. If customers are consistently satisfied with what you already have to offer them, and they keep coming back for more, it’s a good sign that you’re ‘market fit’ and can plan for growth without losing sales and traction.
Expanding a business also requires that all your systems and processes are ready to be scaled up too. In a growing business, it’s very easy to notice when processes haven’t been well established or thought through. As the business stretches beyond its original size and capacity, more and more things begin to slip through the cracks. To avoid initially dropping more balls than necessary, make sure that the following systems are firmly in place before you grow:
- Sales processes: Your business exists to make money. Do you have an effective revenue collection system in place and the necessary financial tools, personnel and resources for tracking your business’ cash flow? It’s important to keep proper record of the financial health of your business so that you can plan accordingly.
- Business plan: As your company grows, your business goals will shift and your strategies will evolve, so be sure to keep your business plan up to date. You’ll also need to ensure that your business processes are well documented so that they are easily repeatable.
- Human Resources (HR): Formal HR systems need to be in place to manage the more complex HR processes that come with business expansion. This includes personnel and processes for ‘hiring and firing’, the effective onboarding of new employees, the allocation of resources and the like.
- Funding: Do you have the necessary plans, networks and systems in place to secure the funding that you need for business growth?
- Customer support services: As you expand your business, you’ll need to grow your customer support services too – especially to retain existing clients while you look to break into new markets.
DON’T NEGLECT THE DEVELOPMENT OF A COHERENT COMPANY CULTURE
Many entrepreneurs fail to take the proper time to establish and communicate their company culture. ‘Culture’, here refers to the shared values, ideals and practices that govern how things get done within a business. These ideals and values point employees in a certain direction (i.e. they become their ‘mission’) and inform their decision making, thoughts, feelings and behaviour. Explosive business growth can easily dilute a company’s ideals and values and can cause a growing business to lose touch with its original vision and client base. What once attracted employees and customers to your business could eventually be lost, which will directly affect your bottom line.
Image Credit: Intelligentpos
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