Every business wants to grow. It’s seen as an indicator of success, while bringing many rewards to your company. This includes higher revenue and profit, improved brand awareness and increased market share.
Although growth is an aspiration for most companies, it’s not always straightforward. If you want your expansion to succeed, you need to create the appropriate time to work on your business, not in it. You need a comprehensive strategy that meets your business needs and does not overwhelm you in the interim.
We have listed the typical barriers you need to consider when trying to scale your business and how you can overcome them.
- Investment of time
- Having the right strategy
- Skills and resources
- Fear
- Demand
- Optimising your business before growth
- Funding
- Reduced cash flow
Investment of time
Running a business requires a large amount of time. Depending on the size of your team and your role within it, you may have plenty of tasks to do daily. As a result, many owners run into the trap of constantly working ‘in’ their business rather than ‘on’ it.
You need to spend time on your company if you want it to grow. This is because it requires careful high-level planning and a strong vision for your future. If you are too busy to invest this time, you won’t create an effective plan – which could stunt your potential and lead to more issues later.
It is imperative that you try to carve out the time to plan your growth. This might mean delegating tasks to other staff to free you up. It’s also worth remembering that if you are very busy, planning your business will prepare you to handle this extra demand, making it well worth doing.
Having the right strategy
Another essential factor in your growth journey is having a considered strategy that comprises the processes and steps that allow long-term results and suits your business. If your plan is well thought out, it’s likely to lead to reduced obstacles as you move forwards.
Part of your planning needs to include market research to understand the demand for your products and services and how you expand them, competitor analysis and considering what your target audience needs are. This will help you ensure your planned growth has the expected demand.
Similarly, you will need to work out how you scale your operations according to your requirements and resources. This includes understanding the cost implications of your growth.
As there is so much to consider, it’s essential to spend time on your vision and utilise external support where required to make sure you have a strong growth plan that you can implement clearly and confidently.
Skills and resources
Growth requires the appropriate skills at every level. Your management team needs people who can support and lead development while adapting to the changes and guiding others through the adjustment period. At ground level, you need to have staff who can meet the increased demand and conduct any new tasks or functions associated with your growth.
You, therefore, need to make sure you have the people you need to allow your growth to progress smoothly and cope with the demand that may come with it. If you don’t have right number of staff for your growth, you will need a recruitment plan as part of your strategy.
On top of your staff, you might also need to introduce more equipment, technology and other assets into your business to facilitate the expansion. Plan for this in advance, including precisely what you need and when you might need it and factor these into your financial statements.
Fear
Many businesses will be scared to take the plunge when it comes to growth. It’s easy to get used to things and stay in your comfort zone, but this means your performance is likely to stagnate.
One of the hurdles to expansion is being prepared to take the risk and progress your company. However, you must remember that business is constantly evolving, and without growth, you might be left behind.
Careful planning and speaking to external advisors, who support your growth, will help to alleviate your concerns and leave you with a strategy you know is based on strong foundations – thereby reducing the risk factor.
Demand
You can only grow if the demand is there. Before committing to the scaling up of your business, you need to see great sales results and have an audience. However, you also need to know what you could achieve – such as increasing sales in your existing audience (through more extensive sales and marketing activities), tackling new target markets or introducing new products to your existing customer base.
As we have already mentioned, part of your planning should involve market research to identify the gaps you might fill and provide an offering that suits their needs and attracts them to your business.
This research will determine whether there’s the warranted demand for your expansion before you commit. This will help you identify the ‘right time’ to grow with confidence that it will translate to increased revenue.
Optimising your business before growth
Business growth requires adjustment, which can be challenging, especially as you adapt to workload, finances and processes. By making sure your company is in as strong a position as possible, you will make the transition period easier and enhance the outcomes you receive.
By improving and refining your operations, you will be better equipped for growth. For example, if your customer service is poor, adding more customers will likely worsen the issue. By optimising your primary functions, you will handle the challenges that increased demand will bring.
This allows you to focus on achieving better results rather than fixing unexpected issues.
Funding
Growth of any kind requires investment. Depending on what you want to do, it can be costly – such as the additional supplies, assets and staff. You, therefore, need to have sufficient funds in place to cover your expenditure.
Many entrepreneurs will use external finance to fund their growth alongside their reserves. Fortunately, there are many solutions in the market, including investment, loans, grants, and alternative funding options.
You must research the funding options to find a fit for your business requirements and goals. This means understanding all the solutions available on the market and the implications of each – including your affordability and eligibility. This enables you to identify a funding source that actively helps you and allows your vision to become a reality.
You’ll also likely need to prove the rationale behind your growth plan and its potential to win over any funding, so be sure to finetune this and be able to present it favourably.
Reduced cash flow
Another financial implication to consider when undergoing growth is the impact on your cash flow. Meeting increased demand usually requires extra costs that can reduce cash flow. This is especially significant in the interim while you wait for your sales to increase in line with your costs.
Although cashflow may naturally be tighter at this time, it’s important not to let your finances get overwhelmed. This could disrupt your growth strategy and affect your business in the present by harming productivity and leaving you unable to cover the costs you need to operate. It could lead to reputational damage if you start defaulting on payments or neglecting other financial commitments or worse going into unauthorised borrowings.
Make sure you plan your finances in advance to enough you have enough cash to function while still facilitating your expansion. If you do run into a cash barrier, you may utilise cash flow options – such as trade, invoice or stock finance – to help ease the situation and keep things moving.
Conclusion
For businesses that plan it well, growth will have a significant, long-lasting positive impact on the business. However, you need to be prepared to overcome the obstacles.
By carefully plotting your expansion and considering all the factors involved, you will stand a better chance of success that benefits your business in the future without creating issues in the present. It will also ensure you have all the resources and support you need during the transition.
If you are trying to plan your growth or need help accessing the finance to enable you to do so, speak to us.
We have access to a plethora of funding sources, so we can discuss the options and find a perfect fit for you. We also help you understand what the right moves are for your business and create an efficient strategy.
Get in touch today to speak to a member of the team about your goals.