Every entrepreneur aspires to grow their business. Growth is indeed a crucial business success metric. To most businesses, growth means increased revenue, more customers, better profit margins, a larger enterprise footprint, higher operational efficiency, or increased business stability. These are the fundamental hallmarks and goals of a growing business.
Business growth is exciting; it proves you’re doing something right and moving forward. However, growing a business is not easy. A growing business is a changing business, and these changes can introduce some unexpected challenges. Things can quickly get out of hand if your business plan or growth strategy fails to address critical issues along its growth path.
This article looks at the common challenges growing businesses are likely to face and how to solve them. Let’s get started:
Rising demands of a growing workforce
Expanding the workforce is a crucial part of scaling up a business. As a business grows, more work needs to be done. And if you don’t want to overburden the existing workforce, you have to hire more workers. Recruiting more hands is essential for delivering the skills and manpower your business needs to manage heavier workloads.
However, an expanding labor force comes with its own challenges. First of all, hiring skilled and semi-skilled talent is a tall order these days. Data from the U.S. Chamber of Commerce shows that there are 11.3 million job openings in the country, but only 6.3 million unemployed workers. The implications of this discrepancy are pretty clear. According to NFIB’s monthly jobs report, a record 48 percent of SMBs are struggling to fill job positions.
The best way around the labor shortage problem is to outsource as many business processes as possible and work on retaining the existing workers by improving the employee experience. Professional services outsourcing enables you to delegate labor-intensive tasks, such as customer support, financial accounting, sales, and marketing, without hiring additional employees. Outsourcing also cuts labor costs and is easily scalable with rising labor demands.
Additionally, whether you’re hiring new workers or outsourcing labor and services, a growing workforce will be more demanding and may complicate HR management. Ensure you have all the necessary resources (HR and payroll managers, worker accommodation, onboarding systems, etc.) to handle an expanding workforce.
More customer needs
Business growth is often dependent on a widening customer base. Getting more customers is obviously a good thing because it translates into more sales, revenue, and profits. The only problem is that you now have to sell to a more diverse clientele with a wider range of needs, preferences, and expectations. So, maintaining positive customer experiences and high levels of customer satisfaction as the business grows calls for more work.
Step up your customer experience management game to keep the momentum going. Figure out how to consistently meet and hopefully surpass customer expectations by understanding what they want. To do this, collect and analyze all the customer data you can get your hands on to draw valuable insights into your customers’ expectations. Also, scale up your customer service infrastructure to maintain responsive communications, interactions, and engagements with more customers at a time.
You may need to break down your customer base into various groups with distinct characteristics to simplify customer experience management, especially when personalizing the customer journey. But this possibility will largely depend on your business model and the range of products or services you sell.
Inventory and asset management
Keeping the supply chain running and the shelves well-stocked is crucial for a growing business. The last thing you want is to run out of stock with ready customers waiting to buy. You can lose valuable customers this way. But again, you don’t want to overstock and tie all your working capital in inventory. So, you need to find the right balance between these two extremes, which you can determine by keenly analyzing and extrapolating sales and growth figures to work out a predictable and sustainable inventory flow rate.
Also, work closely with suppliers to ensure the supply chain can consistently match the growing sales demands in your business. Ask your suppliers about their flexibility in meeting supply demands based on your sales and growth projections. It also helps to line up a few redundant suppliers so that you always have an alternative if one supplier fails to deliver.
Besides the inventory, the business may require additional assets to keep up with growth. These could be hardware, machinery, software applications, land, or equipment, depending on the business. Develop a solid plan for acquiring, running, and managing the new business assets. For instance, ensure every purchase makes long-term economic sense and brings tangible value to the company.
Mounting competition
Growing a business can lead you into the market or scale territories of new competitors. Competition is an inevitable part of doing business — even start-ups have to overcome competitors in their infancy. But as the business grows, competition pressure mounts exponentially as more and more rivals come along. So, it becomes increasingly challenging to retain and tighten your grip on the market.
You have to anticipate and monitor competitors as your business moves up the commerce ladder. More importantly, you must be prepared to adjust your business model, marketing strategies, and offerings, if need be, in order to stay ahead of the competition curve. Here are some more tips for sharpening your competitive edge in the face of rivals:
- Study the competition and differentiate yourself.
- Set competitive prices and quality standards.
- Focus on customer satisfaction.
- Provide great customer service.
- Keep your staff happy and well equipped.
- Promote your unique strengths and values openly.
- Optimize your business process for efficiency.
- Target multiple market segments.
- Stay open to strategic mergers, franchising, licensing deals, and other partnership opportunities.
- Leverage digital marketing.
- Keep innovating.
Remember, healthy competition is good for business; it brings out the best in your company and helps to establish a solid brand identity. But being too aggressive can ruin the market for everybody. For instance, trying to undercut competitors by setting unreasonably low prices can destabilize the market price benchmarks or lead to customers associating your brand with “cheapness.”
Scaling up homogenously
As we mentioned at the beginning of this article, business growth can mean many different things to different businesses. In some cases, only a single segment of the company might be growing while everything else stays the same. And that’s not a problem provided that all the dependencies of the expanding component grow along with it.
For instance, if your sales and marketing department starts racking up some great figures, the service or product delivery pipeline must expand to sustain the sale surge. There could also be many other processes or resources tied to order fulfillment, such as customer service, supply chains, labor, and physical infrastructures, that will need to expand too.
The point is, you have to scale various aspects of the business accordingly to grow the company as a whole without leaving bottlenecks that could potentially stagnate growth or, even worse, cause regression.
Leveraging business intelligence
Businesses, especially those operating online, generate a lot of data. Every year, the global business community accumulates more than 30 zettabytes of information, and that volume is only increasing, according to one report. Most of this data comes from consumers and the market in general. But sourcing the data is the easy part; making good use of it is a different story altogether.
Data can be a valuable asset for informing critical business management processes, from marketing and product design to cash flow and logistics. This is the whole premise of business intelligence. It combines data mining, analytics, visualization, and other data science techniques to uncover meaningful insights such as consumer behavior and market trends hidden in raw data. As a business grows, its data sphere increases too, making data-driven business intelligence all the more important.
Luckily, there are several cloud-based, AI-powered business intelligence tools, such as SAS Business Intelligence, SAP BusinessObjects, Oracle Business Intelligence, and datapine, you can use to consolidate, organize, and critically analyze data to power business growth. Business intelligence helps you make smarter decisions and also:
- Track key business performance indicators
- Streamline business operations
- Predict success or failure
- Spot and capitalize on emerging trends
- Discover problems and determine ways to solve them
- Boost productivity and efficiency
All this is vital for sustaining and driving positive business growth.
Growing technical demands
Business IT is indispensable in today’s digital world. Entrepreneurs across the globe will spend a whopping $4.5 trillion on IT hardware, software, and services this year alone. Individual businesses can allocate as much as 8 percent of their annual revenue to the IT budget. Such figures indicate just how valuable tech is in the business world.
Moreover, as a business grows, its tech demands increase. For instance, we’ve already seen that you need business intelligence tools, customer and employee experience systems, and robust inventory management systems to meet the ever-growing needs of an expanding business. At some point, the business will outgrow its IT capabilities. And you’ll inevitably have to upgrade some or all aspects of your IT infrastructure to digitize or automate the processes that become too complex for the existing systems.
Understanding the problem of scaling
As your business grows, you’ll realize that some of the resources, tools, and techniques that have worked so well in the past begin to fail. This is what underpins all the issues we’ve discussed here. For example, your workforce easily gets overwhelmed by work, and even your most powerful IT systems can’t turn over fast enough. The key to turning all this into progress lies in anticipating and preparing for these changes and coming up with practical solutions to resolve any arising issues.
Speaking of embracing new ideas, technologies, and techniques to fuel business growth, you can do the same with your customer service. Support your growth trajectory by outsourcing your contact center to our highly trained, experienced, friendly customer support agents. AnswerAide is an ideal solution to a growing business’s labor and customer satisfaction demands. Whether you need calls answered or support queries handled, we’ve got you covered. Contact us to learn more.