Growing a business takes patience and a willingness to adapt to change. In our years of working with many different businesses, we’ve noticed a few challenges that crop up time and again, so we thought we’d help you learn how recognise them and offer some suggestions on what to do to address them.
Keeping up with the market
For many, starting a business comes from a desire to be your own boss and/or do something you love. While this isn’t ‘wrong’, the basic supply and demand principle of economics suggests that for a business to succeed and grow they must be offering something the market needs or wants. To know what this is you need to do market research. No doubt it played a part when you started, but as the market constantly changes, you need to do research often to keep up. Not keeping up with what the market wants means you’re essentially running your business on out of date information.
Another reason to keep your finger on the pulse is because the more you grow and succeed, the more your competitors will want to claw back their market share. Don’t rely on customer loyalty if their offer gets better. You need to know if/how the market is responding in order to adapt your own.
You also need to know where to go next, so investing in R&D and innovation to create new, profitable products/services is a way of keeping up with the market.
How to do market research?
- Ask you current customers
- Talk to your suppliers, see what they’re noticing about the market
- Look at sales data to identify and analyse purchasing behaviour trends
- Commission a market research company
Planning and planning again
As the market changes so too will your business plan need to evolve. Market research will help you know where to go. Along with your plan, your strategy also needs to change. For example, when you launched the goal was probably to win new business and build turnover; a year or two in it might be to boost sustainability by increasing the value of each customer’s spend to grow profitability.
What should you do if a new opportunity crops up that isn’t part of ‘the plan’? If you’ve done your market research and have a clear and relevant plan and strategy for where you want to go, you’ll know if the opportunity is the right fit to achieve those goals. Don’t be afraid to say no if it isn’t the right opportunity or time.
Part of knowing if it’s the right time will be cash flow constraints. While you’re in a growth period making the most of your cash flow should be a key element in your business plan as this will be the difference between being able to jump on an opportunity or passing on it so as not to starve your core business of funds.
Know when to let go
Knowing when to hand over control is the biggest challenge facing entrepreneurs. Just because you successfully launched a business doesn’t necessarily make you the ideal person to grow it as these two tasks take different abilities. You’ll need to learn to delegate and train and trust your team to get it right. If you have a clear plan, strategy and procedures this will happen naturally.
In the early stages it can feel like everything is make or break but as you grow, you can’t spend all your time troubleshooting small stuff. Identifying key growth drivers will help you know what to prioritise when an issue arises. And have processes in place that your employees know how to carry out.
To grow up and outwards or sideways?
Following the same business model only bigger is not the only way to grow. You could look to widen your customer base by diversifying your product/service offering or investigate other options such as outsourcing or franchising to find growth opportunities. Just remember that every major move needs to be planned much like it was a totally new business launch.
No matter what stage of business you’re in, we can help you navigate your way through with sensible business advice and accountancy services based on many years of real world experience. Get in touch any time for sound advice in business.