Barriers to Business Growth
What Are The Barriers To Business Growth?
Many business owners aspire to grow their businesses but only a small percentage actually achieves the growth that they aim. There are many barriers to business growth and there are reasons why business owners may struggle to grow their businesses.
You may want to grow your business but are finding the reality quite different. Every business is unique but to help you consider what your growth barriers are, I have summarized below some of the potential barriers that you may be encountering.
Mindset
Is your mindset holding your business back? What are the mental barriers that are stopping you from growing your business? You may be afraid of success, lacking in confidence, unclear on how to grow your business, fear you may fail, look on the negative side of everything, worry about the consequences of your actions or feel that you cannot grow your business. Be aware of how your thinking is acting as a barrier to the growth of your business and consider how you can think differently to enable growth.
Working ‘in’ rather than ‘on’ your business
Are you too busy working in the day-to-day of your business to set aside regular time to step back and focus on your business strategy and business growth? It is challenging to move from working in the day-to-day of your business to be more strategic. To enable your business to grow and prosper, you need to spend time working ‘on’ your business and not just working ‘in’ your business.
Lack of strategic planning and a vision
Have you considered where you want your business to be in the short, medium and longer term? A strategic plan and vision for the business is a critical starting point for growing your business.
Knowledge, experience and skills
Do you or your team need to increase their knowledge, experience and skills to enable your business to grow? What additional leadership and management skills do you and your management team need that can take your business forward? Consider investing in knowledge, experience and skills for you and your team to enable your business to deliver growth. You may also want to access the support of specialists who can help you grow your business.
Doing the same as you have always done
When was the last time you did something different in your business? Are you running your business the same way when you started your business but struggling for growth? To grow your business needs to be flexible, open to change, innovative, creative and prepared to do something different. Consider what needs to be different in your business to enable growth.
Inefficient systems, processes and procedures
Are your systems, processes and procedures inefficient and ineffective? To enable growth, you may need to improve your processes and procedures and invest in IT and software. Consider what you are putting up with on the operational side of your business that is preventing growth.
Not managing the business
Are you struggling to understand how your business is performing? Are you adopting a reactive management approach? To enable growth, you need to be proactive and actively manage your business, including keeping focused on your business strategy, planning what you need to do to achieve the strategy, ensuring action is being taken, reviewing if you are progressing as per your plans, prioritizing and re-prioritizing as things change and reviewing and updating your business strategy on a regular basis. You also need to know what is happening in all the areas of your business by monitoring key performance indicators, regular communication, feedback, conducting meetings with staff and key stakeholders and listening to customer feedback.
Being too risk averse
Are you afraid of taking risks in your business? There should be a balance in the business which can be attained by finding an appropriate level of risk that is acceptable to the management and shareholders. If you are too risk–averse, you may be hindering the growth of your business and if you take too much risk, your business could fail. Business growth involves taking measured risks in proportion to your business and not overstretching the business.
Not resourcing to deliver growth
Is your business struggling to grow through lack of resources e.g. staff, suppliers, equipment, finance, investment etc.? To grow your business, it needs to be adequately resourced. You may need to employ additional people, outsource work, invest in equipment or new premises or you may need additional finance or investment. Consider whether any of these areas are holding your business back.
Inadequate or inappropriate sales and marketing activity
When was the last time you reviewed your sales and marketing activity? What sales and marketing activity are you doing? Too many businesses assume that they will keep generating sales without adequately investing in sales and marketing or without any review or changes to their sales and marketing activity. The right sales and marketing activity is critical to enable business growth. However what is right today may not be right tomorrow, so flexibility and creativity in your sales and marketing activity are essential.
Poor customer service
Is poor customer service impacting your business? What do your customers think about your service? You may be finding that your business is not growing due to customers being unhappy with the service they are receiving. Excellent customer service is a prerequisite of sustainable business growth. Consider what changes you need to make in how you are servicing your customers.
Is any of the above acting as barriers to growth in your business? If yes, then you need to take corrective action to overcome above hindrances.
Companies that have found a sweet spot in the market can be hampered by obstacles that might have helped in the company’s growth in the past, but these can be liabilities in the global, mobile and digital economy. These hindrances could be:
1. Hiring too many people
Adding jobs is a traditional growth metric, but some of the fastest growing and most profitable companies are focusing on lean strength rather than bulking up. Smart companies hire the right people and develop the staff they have. They invest money in training and development and tapping the open talent marketplace to fill in the gaps.
Hiring the right people for the right jobs at the right time is tricky. It takes more than financial planning; you have to assess the impact of hiring on the company’s culture and established business processes. To minimize the risk of hiring inappropriately, be sure to carefully define job responsibilities, authority, key performance indicators, and most importantly, lay out the expectations for the position, both for job candidates and for managers. Remember that your best candidate may not be in your region. Telecommuting and online collaboration tools make it possible to expand the scope of your staffing search to find the best candidate possible.
2. Scaling too early
Uneven growth from scaling too early was identified as the №1 threat to small businesses according to the Start-up Genome Report. Expansion into the wrong market or segment can quickly cannibalize the small enterprise’s resources, while adding too many customers before the product is ready. This is another common mistake. Likewise, there is nothing worse than gaining traction just as your capital runs out. The authors of this large-scale study found that winners kept all aspects of the business in view, from product development to cash flow and orchestrated these dimensions to move in concert with one another.
The report concluded that your business can scale carefully, yet you can maximize the speed of growth by balancing advances in these five core dimensions:
· Team
· Customer
· Business Model
· Product
· Financials
3. Not committing to a digital transformation strategy
Adding digital technologies without an underlying strategy is an expensive and inefficient way to proceed. Understanding the ‘why’ can help guide your business and make sure you focus on resources where the biggest ROI can be found, which in turn helps to further fund the digital investment. From improving the customer experience to expanding into new markets, digital tools are a means to an end, so make sure you don’t lose sight of the destination.
New business models can be quickly undermined by old systems that aren’t able to keep up with newer technologies and on-demand markets. For example, more retailers are turning to pop-up shops and event-based marketing to satisfy the appetites of an on-demand market. A robust communication infrastructure is essential for smooth operations, but setting up and tearing down a traditional PBX network or even full VoIP system is not a reliable option. Likewise, making payments as frictionless as possible is another consideration when transacting business online.
4. Poor Financial Planning
Every business needs cash to fuel growth, and expenses always grow more than the revenue. To expand you need capital, which may mean new investors, a loan, or cash from some other source. Having a detailed understanding of revenue and expenses is essential. This is another area where digital systems can automate and streamline complexity, allowing you to track your cash flow in real-time, and anticipate shortfalls well ahead of a cash crunch.
5. Poor Information Management
Today’s business management is data-driven. With online sales, social media tools, automated marketing programs, and paperless processes, SMBs have access to more operational and customer data than ever before. Data needs to be captured, organized and studied to help guide the company, and now, as GDPR sets a new global standard, poor information management could bring a harsh fine. Better information means more accurate analysis and better business decisions. Be sure the data is accurate, up to date, and stored in a central, secure data repository where it can be most useful.
6. Poor Business Processes
Even with the best growth strategy, a strong team, and a commitment to delivering an outstanding customer experience, your business will stagnate if you don’t have consistent and easy-to-implement business processes and protocols. Document how things are accomplished so you can analyze the step-by-step process, identify flaws and improve processes. However, most importantly, train the team to get the job done. Be sure to include the purpose of the process, a general description, step-by-step procedures, and examples if you can.
7. Poor Communication and Collaboration
Business efficiency is built on better communications. Even the best staff can’t perform if they lack the information to complete their tasks effectively. Effective teamwork keeps the company agile and competitive. Promoting a sense of collaboration and teamwork is essential for the company’s growth. Your team needs to be able to get answers to business questions quickly and be able to work together to implement programs and address the problems efficiently.
Beyond the Barriers
The right technology can help you overcome many of these barriers that intercept the way of small businesses. For example, the right communication tools can help with staffing, improving customer service, streamlining business processes and generating better data for analysis. To use the technology most efficiently, you want to equip your team with fewer solutions that deliver more capabilities.
How to Overcome Barriers in Business Growth?
1. Use sustainability as a unique selling point Consumers are increasingly looking to buy ethically sourced, sustainable products, especially in the FMCG, Industrial sector. Brands should use their sustainability as a point of difference to encourage sales.
2. Think long-term
One of the main cultural barriers across society is the focus on short-term key performance indicators (KPIs) and budgets. A sustainable business needs to encourage and review the long-term goals to get rewarded with long-term results.
3. Communicate differently
People become involved with sustainable businesses for a variety of reasons. For a graduate, it might be the interesting work or the higher purpose. For an investor, it might be the unique nature of the business and its growth potential. Sustainable businesses should, therefore, tailor the way they communicate with each group, depending on their interests. “Be clear about what’s important to each group and also what sort of language and approach will be most effective,”
4. Embed sustainability throughout your organization
Changing organizational structures or creating roles, such as sustainability managers, might only act as a bolt-on. However, a complete change in business culture and managerial priorities is needed to embed the cultural change and responsibility at all levels of decision making,”
5. Improve management skills
Sharing knowledge from the experts to every member of staff is one of the biggest challenges to achieve full sustainability. For example: To give all our design teams a practical knowledge of our future world, so that they can design creatively and effectively. Good management, however, could make this change happen.
6. Take risks
Many sustainable businesses have taken risks by investing in systems and technologies that are not yet in the mainstream. While it is easier for new businesses to set up in a sector with more developed systems working and paying for themselves, it is much tougher for early adopters to raise the finance for relatively unproven technology.
7. Disrupt old business models
Disruption has the greatest impact when it improves the existing infrastructure or attitudes. Continuously track this phenomenon. Disruption is massive, rapid and most likely a permanent change that can be difficult to go through. But disruptive innovation is important to stay on the course, Any business needs to embrace innovation technology and the turbulence that goes with it.
8. Networking
Networking is a socioeconomic business activity by which businesspeople and entrepreneurs meet to form business relationships. Networking allows to recognize, create, or act upon business opportunities, share information and seek potential partners for ventures. The primary purpose of business networking is to tell others about your business and hopefully turn them into customers.
As the business grows, customer requirements, issues, feedback and complaints are often “filtered” through a number of people or procedures before they reach the person who actually does the work. Such filters can become barriers in delivering value to your customer. The Barrier Analysis tool helps you identify those barriers and determine whether or not they are preventing you from listening as closely as needed by your customer.
Dr. Praveen Srivastava, Author, Business Advisor & Life Coach www.praveencsrivastava.com
