8 Ways To Overcome Challenges That Prevent Your Company’s Growth

My definition of growth is not necessarily an increase in sales, but improved profitability.  I believe there are two scenarios that can inhibit growth.  The first is a company that is stuck at a level of operation that sees no growth and is not employing new operating and management skills to maximize profitability.  The second is a company that is experiencing a significant growth curve and is not equipped to handle it.  In both cases there are 8 ways to overcome these growth challenges.  Find out what they are.

Probably the more significant of these two scenarios is a growth curve that the company is not prepared to handle.  Typically the company can take care of the accounting requirements this growth brings, but often the staff and management lack the experience to meet these challenges. 

If you are feeling overwhelmed by the current state of your business, take a little time and go through this check list of issues you should consider.  They may just help identify some weak areas that can get you back on track.

  1. Lack of Capital:  One of the biggest mistakes we make is not planning our capital requirements in advance.  If you planned for growth but did not address your inventory finance and/or bank operating line of credit requirements then you are most certainly having problems with your growth curve.  You are more than likely short of cash flow and cannot buy enough timely inventory.
  2. Lack of Management Skills:  It is important to take some time and assess your weaknesses as they relate to your business.  There is no shame in admitting that you can’t be perfect in all the demands your business presents.  For example, don’t ask me to turn a wrench because I can guarantee it will be a disaster.  There are a number of things you can do such as assigning the responsibility to another staff that has better experience, hire a part time person that is skilled in the area you are weak in, hire a consultant and of course search out courses that will teach you the skill set you are struggling with.
  3. Lack of Information:   A classic issue is not having enough information to identify what is going right and what is going wrong in your business.  Your financial statements hold a wealth of information so get them broken down into ratios, percentages and margins analysis so you can identify where to focus on problem areas.
  4. Lack of a Plan:  This is my pet peeve and something I write about often.  How can you effectively operate a business without a comprehensive plan?  The simple answer is you can’t!  Set out your short and long term objectives and then translate those into a financial business plan that forecasts sales, margins and expenses.  This sets in motion what you need to achieve month to month so you can adjust for variances on a timely basis.
  5. Poor Procedures:  Mistakes often happen because there are procedures in place that waste valuable time and money.  A little time and effort invested in reviewing systems within your business can eliminate costly errors.
  6. Ignoring Risks:  Plowing ahead with changes such as a new accounting system, product line, or location etc., without a proper risk assessment can be devastating to your business. Conscious effort should be made to assess the risks involved in all business decisions.
  7. Lack of Focus:  It is so easy for an entrepreneur to lose focus because you are bombarded with decisions every day.  Consequently, it is important to maintain a vision of your long term objectives to keep things in perspective.
  8. Time Management:  I know this is a huge cliché, but the most common mistake made by owners/managers is not allowing enough time to plan for the issues and solutions that take away from their focus on the main objectives. 

I am obviously just scratching the surface of each of these 8 problems areas that stand in the way of growth.   However, if you take a little time to think about each problem and if it relates to your ability to manage, I think it will be a great exercise to help you achieve your objectives. 

Often the best way to approach this is through a second set of eyes so, contact me for a free consultation and let’s see if you are on track to meet your growth objectives.

 

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