Some people start a business as a continuation from a career that lasts several years. Once their sales start to level out a little, they settle down and start to focus on simply keeping things as-is. For some of us though, survival simply isn’t enough! You may be looking to expand your business as much as possible in as little time as possible. This is certainly an admirable ambition to have. However, rapid growth isn’t without its pitfalls. There are many challenges which can come with growing a business. Here are some of the most common ones to be aware of.
First of all, monitoring different areas of the market. When you first started your business, you probably did a pretty big session of market research. That’s how you secured the beginnings of your customer base. It’s also one of the things which has made you secure enough to start thinking about expansion. However, this isn’t a one-off thing you can perform and then forget about. Business owners need to be keeping up with the market they’re operating in constantly. This is even more true during times of rapid expansion. If you’re taking your business into completely alien areas of the market, and continue to use the outdated principles you were running on a year earlier, your operation will be sure to fail. As you expand, make sure that your market research is continuous. Keep tabs on the way your products and services are aging, and where they fit into the lives of your customers. This will save you from flogging a dead horse and slipping behind your competitors.
Keeping on top of all your HR is another big challenge faced by any growing business. This may sound like something which you can afford to put off, but don’t make the mistake of assuming this attitude! As you expand, you’re going to need to take on far more staff, and this will require a change in how you manage your personnel. After all, without them, you wouldn’t have a business! When you’re in the start-up phases, it’s easy enough to stand up on your desk and address the entire business in one room. When you start to grow, there’ll be too many employees for this. Have a HR department set up and hire in some experienced managers. Make sure they’re keeping staff turnover to a minimum, and keeping their fingers on the pulse of the company culture. You’d be shocked at what office floors can descend into if they’re not managed properly. Holiday calculations, FMLA tracking and so forth all need to be monitored meticulously as well. More staff means more HR paperwork, so make sure you’re preparing for growth in this area.
Foresight is another big challenge tied to growing a business. If you want the process of growth to be as smooth as it possibly can, then you’ll need to know what your next big move is long before it’s actually due. As I mentioned, becoming a larger business calls for a different approach to the market you’re operating in. Your business plan can’t stay rigid, and should be developing continuously as you move along. The choices you make will depend on a lot of factors, but there are certain things which are pretty consistent across all companies and niches. When you started your business, your main focus was probably converting new customers. More accurately, it was simply making enough sales to keep up with the bills! Now that things are levelling out, this should probably shift to leveraging your existing customers, and building upon profitable relationships you already have. The cash flow which stems from existing customer relationships is typically a lot more dependable. When you convert new customers, you’ll see an increase in your overall turnover, true. However, this doesn’t mean that your profit margins will necessarily be what they should! Having said all that, there are obviously certain risks involved in relying too much on existing customers. My point here is that you need to always be looking out for the next positive change you can make to your business. Be on the lookout for new opportunities, but also new risks!
As time goes on and you try to expand your business into exciting new arenas, make sure to be aware of these three challenges you’ll come across. Of course – the fun doesn’t stop there! Even if your expansion is incredibly smooth, this will draw the attention of your competitors and bring about new challenges. Stay alert, think ahead and do something that sets you apart once in a while!