Growing businesses face a range of challenges. As a business grows, different problems and opportunities demand different solutions - what worked a year ago might now be not the best approach. All too often, avoidable mistakes turn what could have been a great business into an also-ran.
Effective leadership will help you make the most of the opportunities, creating sustainable growth for the future.
Here are a few highlights of risks and mistakes that are common to growing businesses:
1. Keeping Up
Market research isn't something you do as a one-off when you launch your business. Business conditions change continually, so your market research should be continuous as well. Otherwise you run the risk of making business decisions based on out-of-date information, which can lead to business failure.
2. Planning Ahead
The plan that made sense for you a year ago isn't necessarily right for you now. Market conditions continually change, so you need to revisit and update your business plan regularly
3. Cash Flow management
Good cash flow control is important for any business. For a growing business, it's crucial. Cash constraints can be the biggest factor limiting growth and overtrading can be fatal. Making the best use of your finances should be a key element in business planning and assessing new opportunities. With limited resources, you may need to pass up promising opportunities if pursuing them would mean starving your core business of essential funding.
4. Problem Solving
New businesses often run in perpetual crisis mode. Every day brings new challenges that urgently need resolving and management spends most of their time troubleshooting. As your business grows, this approach simply doesn't work. While a short-term crisis is always urgent, it may not matter nearly as much as other things you could be doing.
5. The Right Systems
All businesses produce and rely on large volumes of information - financial records, interactions with customers, employee details, regulatory requirements and so on. It's too much to keep track of - let alone use effectively - without the right systems. Responsibilities and tasks can be delegated as your business grows, but without solid management information systems you cannot manage effectively.
I hope this helps as you face the daily challenges of growing your business. Please let me know what you think. Gerry@polarisgroupmc.com