One thing on every small business owner (especially when their business tart to do well) is expansion. It’s a mere idea known to thousands, and millions of people are expanding and becoming a “big” business. However, one thing you should understand is that expansion is not all about getting a new space and filling it up with new employees – there is more to it. Many business owners are all about the benefits that come with expanding their business while they omit some of the challenges that come with increasing their business. Well, let's take a look at some of the common challenges you can face as a small business owner while trying to expand your business.
1. Insufficient Capital
Research shows that about 8 to 10% of the business that fails during expansion is due to lack of capital and this is truer for businesses that are poised to expand. Sometimes for your business to stay afloat, you might need to access more funds with spending outweighing your income. So, keep more eye on your cash flow and avoid falling into this trap.
2. Failing to Establish an Organizational Structure
Even before your business starts to grow it is essential that you lay out your company’s structure as doing this will offers guidance to employees. Without doing this, your employees might find it hard to find the right person to report to in case of an issue. This may create a lot of confusion and can cause tension between employees – this is not good for your business.
3. Having Poor Hiring Practices
We have seen business been pushed to lowering their hiring standards to keep up with demand due to an influx of new clients. This is yet another trap to avoid as hiring the wrong person can cost your business dearly. So, invest time and resources in hiring the right candidate for each post.
4. Expanding Without a Core Team
Employees are no doubt the backbone of every business, so when you are thinking of growing your business you need strong, dedicated, and well-trained employees by your side. If you overlook this and try to do everything yourself, this will hamper your company’s ability to grow.
5. Neglecting Company Culture
Another pitfall to avoid is trying to ignore the importance of establishing their company’s culture while focusing on finding new clients and keeping existing ones happy. About 64% of workers report that their company doesn’t have a strong work culture and this means that practices and virtues that influence the behavior patterns of employees.
6. Losing Sight of Marketing
Research by Infusionsoft also shows that about half of small business owners don’t know it their marketing efforts are effective and as they relegate marketing to the back burner while they focus on meeting client demands.
7. Ignoring Churn Rate
Many business owners’ projections and attempt to scale based on assumed growth as their primary aim are mostly to focus solely on their growth rates. Failing to take your churn rate into account can cause you to spend more than what you make.