Scaling a business is a challenge that not every entrepreneur succeeds at. Around 20% of businesses fail within their first year of operation, but 60% fail within the first three years, according to Nerdwallet – making growth a much riskier endeavour than initial trading. But what are the challenges that face the small business in attempting growth, and how can they be met?
#1 – Shifting Markets
Any business planning to expand needs to contend with the potential for market shifts. These changes impact stable businesses too but can have a multiplicative impact on a business rendered vulnerable through capital investment in a specific growth direction. Changing consumer wants can co-align with more agile region competition and rival start-ups to make your expansion less economically viable, without considering new business options in the same vein.
#2 – Hiring and Staff Expansion
Business expansion does not just mean expansion into new regions, markets or sales portals. It necessitates an internal shift, too, whether the incorporation of new or expanded departments or the addition of new regional locations. This means that your staff cohort, necessarily, has to expand.
But staffing can be difficult – not only to cost, but also to orchestrate. Even in an economic state that threatens rising unemployment, it is a jobseeker’s market. The advancement of issues such as flexible and remote working, alongside public support for strikes, has rightfully inspired workers to seek well-recompensed roles with agreeable benefits. Significant pay rises in new roles might not be within your budget, but simple benefit offerings like remote working and access to resources can make all the difference in hiring success.
#3 – Finances
The elephant in the room when it comes to any growing business is money. Growth requires capital, and capital can be hard to source. Unfavourable economic conditions make cashflow even more important a metric to track, and the direct manner in which you manage your holdings as a business makes all the difference to this factor.
Financial matters are not the easiest matters to manage alongside concerted efforts to grow effectively, which can make enlisting third-party consultants, such as RSM Global, particularly helpful. With an alternative angle on the financial footprint of your business, you can make shrewd financial decisions that remain compliant with financial and tax regulation.
#4 – Tech
Lastly, it is important to acknowledge the vital role of tech and tech innovation to the viability of growing businesses. This tracks somewhat with the manner in which markets can shift and change beneath a business, as new tech systems and capabilities can result in significant changes to both competition and consumer demand.
In growing, you should be sure to put some capital aside for investment in new tech solutions. Early adoption of cloud technologies enabled businesses to think ahead to new forms of subscription model, and survive remote working with better ease. What technologies might give you an edge over competition in the coming years?
