Removing obstacles to business growth
Learn how long-term planning, employee retention, and strong finances can help you overcome challenges and take your small business to new heights.
Business growth can stall for a variety of reasons: The economy tanks, new regulations raise your costs, a crucial employee resigns. These types of situations can throw your business into a tailspin – but only if you let them.
When faced with issues that seem beyond your control, it’s not the challenges – but rather your reaction to them – that can make the difference between overcoming them and letting them overcome you and your business.
Here are three common business obstacles and solutions for tackling them.
Obstacle 1: Market changes
When sales drop due to changes in your target market, it’s time to re-evaluate the needs of your customer base. This is when long-range strategy – a strategic plan of at least three years – and business planning are crucial.
A traditional SWOT analysis of your company’s strengths and weaknesses, and the external opportunities and threats to your business should be done at least once a year as it can help redefine your long-term vision. The simplest way to do this is to start listing points under each category. This forces you to assess your competition, take into account changing trends, look at competitive price points and offerings, and analyze strengths so you can build upon them.
Supplement the SWOT analysis with a more in-depth analysis of the competitive landscape. List competitors, their features, price points, and anything else you know. For instance, if competitors have lower prices, that’s a threat. But you don’t necessarily need to drop prices. Instead, offer more value or communicate your value better.
Also, be sure to talk with customers – try conducting an email survey. Ask new customers why they chose you. Ask departing customers why they left. Is your product becoming outdated? Are you meeting customers’ changing expectations? Perhaps you need to invest in research and development to innovate. In the interim, offer special renewal deals – early, before customers start looking elsewhere.
Obstacle 2: Loss of valuable employees
According to a 2012 Economic News Release published by the Bureau of Labor Statistics, the average length of employment is under five years. So how do you get the good employees to stay? Start by communicating your vision and career opportunities. Today’s employees, especially knowledge workers, or employees who are paid to think, want to see a career path.
It also helps to offer financial rewards, benefits, and perks, such as a 401(k) plan with matching contributions, health insurance, and paid vacations. And don’t overlook low-cost perks, such as flexible working hours or public recognition. Finally, be sure to ask employees why they stay – it might yield true insights about what you’re doing well.
Obstacle 3: Financial strain
If you’re not prepared to meet a spike in demand, or there’s a gap between making sales and receiving payments, then you might not be able to harness an opportunity when it arrives. To stay ahead of the game, focus on maintaining strong financial management and reporting.
Take a look at the reports and dashboards from your accounting software – they can help you get a handle on cash flow dips, seasonality, sale-to-collection cycle, expenses, and other key metrics. They can also help you find money you didn’t think you had. Run these reports regularly, and go over them with your management team. More eyes are better at spotting things.
Staying agile and keeping cash flow healthy will likely require outside sources of cash, such as business lines of credit and business loans. But be sure to have a plan for how you’re going to use these funds. Disciplined money management makes all the difference.
When it comes to breaking down barriers to growth, work the problem. Armed with the knowledge, ingenuity, and innovation that got you this far, you can overcome all obstacles.