Common barriers to growth

Even the most successful business will experience a slowdown at some point, whether due to economic forces, changes in demand or fast growth.

The key is for business owners to identify the signs in time and take the necessary steps to stop them impeding success.

Here we look at some of the more common factors that affect growing businesses and how to tackle them.

Avoiding risk

Setting up a business is the biggest risk imaginable for most people, so it’s fair to say that most owner/managers aren’t typically risk-averse. That said, as time goes on and the money starts rolling in, people can become wary of throwing caution to the wind and jeopardising everything that they have worked so hard for.

This often results in avoiding the kind of forthright, decisive action that initially brought the business success. And many business owners do so at their peril.

While uncalculated risks are always foolish, making a well thought through but unconventional decision, or one outside of your comfort zone, is what keeps businesses fresh.

Business owners should continue to embrace risk as the business grows, whether through complementary products or services or new routes to market. Positive steps like these keep you ahead of the competition and give the business the energy it needs to move to the next level.

Getting bogged down in the detail

In the early days business leaders tend to be responsible for every aspect of the business, from accounting and payroll, through to marketing and IT.

Quite naturally, as the business grows it can be hard to let go of these areas - especially with nagging concerns about cash flow. The tendency to ‘do’ rather than delegate is the curse of many a business leader and can lead you to be over-stretched - unwittingly compromising specialist areas like marketing, HR and finance.

Of course when you spend all your time ‘doing’, it leaves little room for the kind of strategic thinking that will grow the business. All organisations need someone at the helm who has a clear overview of where the business is and where it should be. Without this you’ll be treading water far longer than you need to.

Trust in those around you and make the necessary appointments to bring in skills that will take the business forwards. It may cost more now but will save thousands in potential mistakes and/or missed opportunities in the long-term.

A reliance on old processes

Many business leaders rely on clear, structured processes to develop a fledgling business. But there comes a time when the business evolves to outgrow them. Likewise, scattergun entrepreneurs often use their genius to carry the business, but eventually require structure to keep people and processes on track.

Whichever camp your business falls into, don’t count on traditional methods to sustain the business indefinitely. This could mean taking the plunge with a new IT system; reducing 25 spreadsheets down to one; or simply removing the middleman where he’s no longer needed.

We know best

We’re all familiar with the people who’ve been in it from the beginning and love the company like it’s their own. They are the ones who helped to get the business off the ground and to whom you feel indebted for your success so far.

But supportive as the old boys network can be, it can also suffocate a business. Cliquey cultures often give rise to an over use of buzz words and prevent objective thinking. Those who hold senior positions may adversely influence business strategy in areas where they lack expertise, such as sales and marketing, which in turn prevents development in line with market needs. Their intentions may be noble, but the outcomes are often disastrous for revenue.

While it is important to recognise and respect the contribution of more experienced employees, leaders shouldn’t fear challenging opinions and/or attitudes that may be stifling the business. Know where the line should be drawn and work to bring old and new staff together as constructively as possible, so that neither reigns supreme.

Driven by sales

A lot of fast growth businesses realise their success through a sales-driven approach that quickly drives up revenue, but often leave something wanting when it comes to customer experience. Likewise, marketing often takes a hit when sales performance is at the core of a business.

Without dedicating time to nurturing customer service, recurring revenues can be poor, not to mention the long-term brand damage incurred by neglecting marketing activity. Businesses should always have an eye on the future, so it’s important to invest time and money into all areas.

The challenge of HR

For businesses that grow quickly, looking after employees can suddenly become an unwelcome challenge. And while people management isn’t why you went into business, you shouldn’t underestimate its impact on productivity and growth. Not to mention your legal obligations.

It may go without saying, but the more people you employ, the more exposed you are to complex issues like grievances, disciplinaries, stress and maternity pay. If handled inexpertly or by an unqualified member of the team they can lead to situations that directly impact morale (at best) or result in legal action (at worst).

If you have more than 20 employees, now is the time to think about HR. Whether an in-house professional, or an outsourced service, you need to have the resources in place to offer managers and employees the support they need, while reducing risk to the business.

The disconnection

For larger growth business, a disconnection often develops between the operational part of the business and support areas (such as IT, Finance and HR), which can lead to a breakdown in communication and inevitable inefficiencies. If these areas don’t work well together and aren’t aligned in terms of objectives and business vision, the business can soon suffer.

Changes in demand

While the business is growing well now, it’s important to have a 3-5 year plan that will help you to move through each stage of the business. Know what threats are on the horizon, such as emerging competitors and changes in demand and plan with these in mind.

All markets are subject to change, but if you plan accordingly you’ll find it easier to ride the wave of change and initiate it when you need to.

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