Success sometimes comes with setbacks. As your small business grows, you may find your expanded operations run into obstacles that weren’t there before. Here are five challenges of growth and how entrepreneurs can respond:
1. Lack of visible cash flowIt’s a problem when a business’s growth is only on paper. Many organizations operate on additional funds they are owed, but have yet to receive.
As the business grows you may take numerous diverse orders and need to make sure available stock can keep up with demand. This means you have to increase supply shipments and take orders you will fill with merchandise that doesn’t exist yet. All of these hypotheticals can cause you to lose track of which numbers are projections and what you have in the bank.
As a small business owner, you have to carefully monitor your cash flow, perform routine audits and enforce consistent reporting to make sure your actual operations match your accounting data.
2. More employees
When you start, you may just have a couple of employees; it’s easy to check with everyone’s progress and coach your workers. Once you take on a certain staff level, however, you can’t provide hands on instruction on a regular basis.
You need to learn to delegate. The business may be your idea, but you need to hire managers and other team leaders who are just as invested in the organization’s success. If you look for responsibility and leadership qualities in the hiring process you can find a staff who will help your business branch out.
3. Outgrowing software
More employees mean more users on the company’s software system. As each individual collects data and creates reports, you have to make sure they aren’t entering contradictory information. Simple software solutions utilized by small startups often don’t offer the functionality larger companies need.
If you want to invest in a new software solution, you should choose a system with flexibility. Instead of purchasing an asset with just the needs of your current operation in mind, you should invest in technology that’s able to grow with you.
4. New regulatory requirements
In most countries, the size of your business will determine which taxes apply to you. As you hire more employees you may find you are now regulated by different reporting standards or government regulations.
You need to keep abreast of your country’s laws concerning business size and prepare your operations accordingly. Checking with an accounting consultant may help you file correctly and ensure you don’t pay more than you owe. Automated accounting software solutions can also assist you by helping you maintain visibility into compliance issues.
5. Favouring new customers over existing clients
The ability to attract new consumers is paramount to maintaining growth, but companies can’t neglect the people who made original success possible. Some growing businesses, however, ignore the needs of their current clients to focus on marketing or other practices that attract new customers.
Returning consumers are usually more profitable than new ones. You should use customer relationship management software to keep records on your best clients. Make sure your software solutions work in tandem so you can see how business processes affect customer satisfaction.
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