Growing business, whether big or small, face a number of challenges. As they grow, their problems increase, and the business owners need to provide immediate solutions in order to avoid any disturbance to the business growth. Besides, there is a need to find a different solution every time as what worked earlier may not work again.
Recognising these pitfalls and overcoming them is very important to let the business grow and thrive. As a business owner, you need to make sure that you take all the necessary steps in order to avoid all the problems that may arise in the future. Also, effective leadership will create many opportunities for the business to grow.
Let’s now take a look at the risks and challenges that most small business face and how to overcome them.
Keeping up with the Competitors
Market research is not something that you should only be doing when you commence your business. The business dynamics and market change continually, and so, your market research should also be continuous. Otherwise, you run the risk of deciding on the business with outdated information, which sooner or later will lead to business failure. The more your business succeed, the more your competitors notice you. Therefore, they react to what you are doing. Thus, if you don’t research what your competitors are up to, they will soon take the competitive advantage over you. And you will be left behind. Apparently, customers are quick too to find alternative products.
The published information can be good sources to find information related to what your competitors are up to. And as you and your business grow, your own experience can be advantageous and valuable as well. You need to build an in-depth picture of what your customers need and how they behave. This will help in knowing which the best market approach is for them.
You also need to take some time off to talk to your suppliers and business partners. They can be the best source for market information. Besides, you can also encourage your employees to share their customer and market experience.
You can also carry our extra research. For instance, you can test your products/services by selling it to a selected group of customers and analysing their reaction. A market research agency or freelancer can be hired for research.
Always Planning Ahead
The plan that you made a year before may not be right for your business now – it may have become obsolete. As said earlier, market conditions change all the time. So, you need to revisit and update the business plan at regular intervals.
As your small business grows, the strategy also needs to evolve and suit the changes. For instance, your focus during the start of the business may be on winning customers. But after two years of staying in business, you may now have to focus on how to build profitable relations with your customers in order to maximise growth.
At the same time, you also have to be alerted for the new opportunities. There are risks if you rely solely on your existing customers. You need to diversify your customer base to overcome this risk. Following this business model is the route to growth.
But, it is not the only growth path. There are other strategies as well, such as outsourcing, franchising, etc. These options also provide growth opportunities.
You must understand that if your business is successful currently, then it will automatically have an advantage in all the business opportunities. You need to plan for all your moves, be it small or big.
You also need to always look for opportunities. Ask yourself if your new idea will suit the product’s strengths. Always have a vision of where your business is going and where you want to take it. Every new step brings some amount of risks – always have this in your mind. Notably, you need to regularly review the risks you face and develop contingency plans for it.
Cash Flow & Financial Management
Cash flow management is imperative for every business. And for a growing business, it is crucial. It contains the most significant factor that may be limiting growth. You need to make the best use of finances and assess new opportunities. With limited financial resources, you may be not utilising the promising opportunities for the growth of your business. If you lack funds, you can also consider applying for a business loan.
You need to control all the elements in the working capital carefully to maximise the inflow of cash. Good stock control is also important for a growing business. Holding on to obsolete stock may be one of the problems that are keeping your business from growth. You need to clear up your stock periodically.
Insufficient finances are also one of the challenges that many small businesses face. Funds are required to grab all the growth opportunities with both the hands. Be it to buy raw material for a new and big order or to update the outdated machinery. Not having enough funds to overcome these situations can be a major drawback.
So, you can consider availing a business loan without security. Many NBFCs and online lenders offer unsecured business loans to small business owners in need. You can also consider availing government loan schemes, such as MUDRA loan.
A smart businessman not only overcomes the challenges he is facing currently but is also prepared for challenges he may face in the future. It is required to do thorough market research and always be clear about the perspective of the customers. And never overlook any aspect of the business just because the business seems to be working just fine.