Business growth is inevitable if your startup is successful. Even though expansion is something that almost all businesses are aiming for, it certainly comes with a large number of pitfalls and risks. The way you approach those challenges is crucial if you want your business to continue growing and thriving. Competition is changing rapidly, which is why it is very important to stay present and informed.
Expansion of your business brings with it a lot of struggles that you did not have to face when you were just starting out, and it implies different kinds of strategies and a different business plan that you will have to learn and create. It also means that you will have to delegate and/or outsource more tasks and put more trust in your management team, as you will have to accept that day-to-day control of all details is simply impossible. Letting go of full control is probably the most common issue for successful small entrepreneurs to deal with when it comes to expansion.
In the end, dealing successfully with your new business challenges is a by-product of good planning and well-organized management. Here is a step-by-step guide on how to go through this phase more effectively.
1. Research The Market Properly
This is definitely not something you should only do once. The business environment is constantly changing, and you have to keep up with it and stay on track. Otherwise, you are in danger of making important decisions that are based on outdated information. The business market is moving fast, and so must you. All those loyal customers are not going to wait for you, and they will replace you in a second if they find a better offer. A very detailed analysis of what your customers want, their behavior, and a great marketing strategy are crucial if you want to get on top of the market game.
2. Update Business Plans
Similarly, your business plan should keep up with your company’s success and constant changes. In order to keep your plan efficient, it is important that you revisit it and update it regularly. The growth of your company must be accompanied by an evolved business strategy. Priorities will not stay the same, and for example, your main point now could be building a profitable relationship with your existing customers, instead of winning new ones.
3. Business Process Re-engineering
Sometimes business plans are just not enough, and the step that you have to take needs to be more radical. In that case, you should consider business process re-engineering, which is similar to updating your plan, but also very different. It involves completely recreating business processes, without holding on to the old ways of working, while business process management (or plan updating) means reworking the old ways.
BPR goes along with a great risk of failure, which is why there are some key steps that you have to take in order to avoid the pitfalls. Those steps are: properly communicating the need for change, thoughtfully compiling a team of experts, locating ineffective processes and defining key performance indicators, reengineering all the processes and, lastly – but certainly not the least – testing newly engineered processes. BPR is a very time-consuming and expensive process, which is fruitful only if every step is thoroughly analyzed and thought through.
4. Managing Finances And Cash Flow
Cash flow is very important for any business, but for a business undergoing expansion it is crucial. Cash limitation is usually the biggest slow-down factor. Using your finances in the smartest way possible is one of the key ingredients of a successful business, and it will maximize the revenue. Managing your stock and making sure that your supplier management is as effective as possible are very important steps in ensuring sustainable prosperity. Keeping outdated stock can be a problem that needs clearing up from time to time. Also, planning ahead is a great way to stay on top of your finance management game.
5. Choose The Right System
In this era of information abundance, every company generates and depends on large amounts of information every day – contracts, agreements, financial records, employee information, and so on. You can see how using ineffective systems can be disastrous – lose track of only one piece of information, and it will set you back, let alone if it happens multiple times.
Delegation and procedures are inevitable, but without a stable and effective management information system, your business is doomed. As your business grows, the system will become more and more complex, and the potential risk of losing information will be greater. Managing information within a smaller business is not that big a deal, but informality that works just fine for a smaller business is definitely not going to work for an expanding business. What you need is a well-organized management information system, proper agreements, and a bit more formal communication. Do not hesitate to invest in the right system that will work best for your business. It will make day-to-day tasks much easier for you and your team, and it will not slow down the company’s growth.
6. Welcome The Change And Keep The Enthusiasm
One of the greatest silent killers of growth is settling down. Once you are content with your company’s success, it becomes much harder to welcome the change and keep the engine running. While there is definitely nothing wrong with being satisfied by what you have accomplished, settling in your comfort zone is certainly not going to bring you any bigger success.
Commitment is the number one key to success. Hard decisions will wait for you to make them, and going out of your comfort zone is going to bring you many risks, but much more business (and self) growth, as well. A process of expansion is very time-consuming, so take your time to think through the decision thoroughly.
Aside from his primary area of interest and expertise, business consulting with Curtis Valuations, Ian Pearson is also as a passionate sports fan, and a nature and photography enthusiast, and is always trying to keep up to date with tech innovations and development.