Choosing to start a business can be one of the most challenging and exhilarating experiences life has to offer. Creating a sound business model is the foundation of any successful enterprise, though it does not guarantee a future. Growing your business can be just as, if not more vital than, creating it. Knowing where to scale and where to increase productivity is essential in developing a financial future. There are many short-term obstacles to growth, as well as more serious situations and problems which can stop growth in its tracks. Four of the most common issues are easy remedied by experience, innovation, and the willingness to change.
1. Not Knowing Your Customers or Competitors
Pay close attention to the needs of your customers, with a mind towards innovation and their ever-changing needs. As traditional marketplaces transition to digital spaces, companies are having to shift their focus towards an online audience, which may have different expectations than those in their brick-and-mortar store. Have real-time access to the analytical information to back up your strategies. How often are customers returning? How long do they spend on your webpage, or in your office? Only by gathering statistical information on your customer base, can you understand how effectively you are meeting their needs.
Take note of what other thought leaders are doing in your field. It may be that they have noticed a trend or discovered a process which makes it easier for customers to repeat their business. Competitors are an excellent source of information in to what may or may not be working for similar audiences. By not taking the time to investigate these strategies, or not fully comprehending the needs of your customers, the growth of your business may come to a stand-still.
2. Not Having Enough Money
Few things are more disheartening than the inability to grow or expand due to restrictions caused by finances. Well-funded projects often out-perform those running on financial fumes due to flexibility and time allowed for development. The same goes for companies looking to hit their financial stride. Ultimately, growing a business requires money. Without the ability to hire more innovators, increase production, or invest in new marketing strategies, there is no room to expand. This is why many fledgling start-ups search out investors or look to borrow from a financial institution. Few businesses are profitable in the beginning, and many take years to go from red to black.
3. Not Properly Tracking the Money You Have
Even when a business is properly funded, growth can be slowed or halted by financial situations which may limit the company's ability to function. This may include an audit by the IRS, unpaid work hours due to an accounting error, or property damage caused to an under-insured employer.
Unanticipated events, such as the recent trouble experienced by small home rental businesses have severely cost them time and growth potential. Home rentals which may rely on e-commerce booking sites, such as AirBnB, in order to generate a customer base, have discovered that their home insurance policies do not extend coverage for a change in occupancy. This has lead to multiple instances in which small business growth has ground to a stop. Keeping close track of your money is vital in avoiding these possible financial emergencies.
4. Making Poor Decisions and Faulty Leadership
Successful companies require motivated people. The most driven individual should be the person at the top, whose vision for the business needs to be clear and concise. Poor leadership can cripple a business, and prevent the company's potential from being realized. Growth can slow when management lacks vision or is unable to make sound decisions on the next course of action. Risk and reward needs to be carefully balanced, and all levels of the business should be considered before a new path is forged. An unwillingness to invest in new research, innovation, and sales tactics may kill a company's growth potential before it even begins.
These aren't the only things that can kill the growth of your business, but if you focus early attention on them, it may be much easier to achieve your goals for growth. Your ultimate goal is to develop an amazing, efficient company filled with talented people who love their job. Making some of these hard decisions decisions now will help you get there.