Challenges of business growth and how to tackle them

Small and medium-sized enterprises (SMEs) account for 99% of the business population in the UK and they keep the UK economy humming along nicely, but when it comes to growing your SME, it’s fair to say that challenges abound

Everyday entrepreneurs are looking to set up a new business across the UK. Launching a business is an exciting, albeit daunting time. Very soon when the business is off the ground, when milestones are surpassed and goals are reached, you realise that more is yet to be done. Every iota of time and energy that you have put into opening the doors must now be redirected into continually growing your business.

Business growth is a natural progression and the desired outcome for many businesses. Once you’re in the growth stage, you will start to see some tangible results by means of increased output, greater sales, and more staff on your payroll to name but a few. But as a business growth specialist working with entrepreneurs across London for many years, we can safely conclude that not every business owner is prepared for growth. In fact, some of them are paralysed by the prospects of growth. The experience has prompted us to examine the dynamics between business and the growth path it takes. So we put our thoughts and insights into these articles Organic growth strategies for small businesses and External growth of a business. Today, we look to discuss the top five challenges a growing business can face and how to overcome them.

Avoid poor planning

Poor planning can see a thriving business crumble under pressure just as rapidly as it grew. Whether your business has just started or is ready to expand, it is essential to have a solid and well-considered business strategy that encompasses your growth plan.

Some useful points:

  • Establish what you want to achieve and create a list of short and long-term goals to grow your business.
  • Schedule a regular review of these goals and assess how your business is performing.
  • The market is continually changing, so it is important to revisit and update your plan regularly. As your business evolves, your strategy also needs to evolve.

For example, your original goal may be all about gaining new customers, but if this strategy forces you to cut price in order to compete, consider shifting to a value proposition and aiming to build stronger relationships and maximise satisfaction with existing customers instead. A well-defined value proposition can often present greater (and more reliable) opportunities for profit.

Don’t fall behind

One of the biggest mistakes business owners make is failing to keep up with industry trends and remain relevant; i.e. you aren’t investing in products or services that match or exceed market averages.

Suffice to say the market is constantly changing so it pays to stay alert by taking advantage of new information, keeping tabs on your competitors, talking to your customers and utilising your network. These are clever ways in which you can adopt and adapt to the changing trends.

Another point to keep in mind is disruptive technology. The lesson we all learn from Amazon or Uber is this new norm has the potential power to reshape how the entire industry operates. While not everyone is capable of thinking up the next Amazon or Uber, it doesn’t mean you shouldn’t try or you can’t replicate their business model in your sector.

Use cash-flow forecast to your advantage

A profitable business can go under if cash-flow is poor. Having a stable cash-flow is often touted as one of the most important factors used by investors to determine a business’s potential. The reason is simple – it tells you how well a business can support itself. During the growth phase, you’re likely to need more cash to employ more staff, get a bigger office or buy more raw materials to cope with demand, so don’t get caught off guard with not having enough money to keep the business going. At Berley, we help our clients to understand the importance of cash-flow and prepare a cash-flow forecast so they can enjoy a positive cash-flow throughout the financial year. If you want to know more about cash-flow, cash-flow gap, and how to fix a cash-flow gap, check out this article ‘Cash is king?’.

Taking on too much, too fast

One of the greatest challenges of business growth stems from business owners taking on too much and burning out.

It’s okay to ask for help, take on advice from other business owners, or even hire someone to help bounce ideas off and give yourself a break. Remember, you don’t have to do this alone and increasing your workforce and delegating tasks is a sign of a healthy business. Operating proactively rather than reactively when under pressure is wise.

Losing culture

It can be easy to get carried away in the excitement of business growth but don’t forget the unique set of beliefs and values that is dear to you and your company.

As more people enter the organisation, ensure your values and the company culture you have worked so hard to establish doesn’t get derailed. Let these values guide your decisions, hire people who will embrace these values – because if they believe in what you do, they will contribute and make progress, thereby positively impacting business growth.

Tackle business growth challenges with Berley

As London business growth specialists, Berley has a proven track record of helping small business owners to grow. We look to cultivate a symbiotic relationship with you – the more successful you are, the better it is for us as you are likely to require our expertise in business growth and our full suite of accounts services to fuel your expansion.

For more information on how we can help your business grow, call us on 020 7788 8261 today.

If you’d like more information concerning business growth, you can check out:

This post is intended to provide information of general interest about current business/ accounting issues. It should not replace professional advice tailored to your specific circumstances.