Growth is extremely important for any business, especially if yours is a start-up or a small business. The opposite of growth is stagnating, and when a business stagnates, it is a sign that it is just about to go or simply vanish. Growth is all about meeting business challenges and a business consultant company can help to put a scientifically formulated strategy in place to beat stagnation. Small and big businesses both are susceptible to stagnation at some point of time or the other. Those that grow are the ones that are able to recognize sluggish times and take corrective steps.
The reasons that drive entrepreneurs to start a business are wide but almost always it is the values that they attach to it. What a business emphasises are almost always the skill sets that entrepreneurs possess. Typically an engineer entrepreneur, for example, will focus on production rather than on marketing and mostly management will be directly in the form of supervision. Emphasis will invariably revolve around developing products and entrenching it firmly in the marketplace. This is where a market research company plays an important role to identify the potential in the current market.
Problems Faced by Small Businesses in Growing
Typically small businesses operate under trying conditions. Most small businesses are single operating units supplying goods or services with few channels of distribution. Money is hard to find and most of it has to come from the founder or his associates and friends and relatives. Within these limitations, small business entrepreneurs are more likely not to be able to plan for the future. Instead of planning what they do is manage crises that keep on cropping up time and again.
Here are but a few harbingers that stifle the growth path. This is not a comprehensive list but a glimpse of what most small businesses face in fulfilling their objectives.
- Excessive focus is on profits (or averting losses) instead of concentrating on firmly establishing the products. Entrepreneurs, therefore, expend a larger part of their energy and time on generating positive cash just for the sake of survival rather than on planning and strategizing. This has to change through creating a different mindset in which the manager puts more of his efforts on studying new demands and trends.
- The second problem is the administrative demands. When the emphasis is on making profits to stay afloat, important functions such as record keeping, maintaining proper books of accounts and meeting compliance or reporting take the backseat. The reasons often can be attributed to excessive pressure on the entrepreneur, his inability to handle critical functions or plain incompetence in certain roles. This leads to ignoring some functions that lead to bigger problems.
- The third problem is the demand on the manager’s time. When managers are engaged in fighting crisis the time that they allow to critical roles is reduced. This may require a change in management perspectives and style, and bring in expertise from outside the organisation. This will, however, increase the financial burden that is difficult to find. The net result is it causes work backlogs, more crises and overall confusion.
The 4 Stages of Business Growth
Broadly all small (as well as big) businesses go through 4 stages before they reach maturity in which the organisation becomes sustainable.
Stage 1: The Inception Stage – At this time all or most of the business’ effort will be directed at ironing our issues related to product development and making it acceptable in the marketplace. Other major issues include: (1) removing the mounting pressures on the need to make profits for survival; (2) streamlining the administrative process to provide for a flawless system of documenting, reporting and statutory compliance; and (3) strategising time planning for managers.
Stage 2: The Survival Stage – Once the inception stage is streamlined, the business will then have to think in terms of making the business sustainable. This stage is all about making changes to management style and delegation of authority up and downstream. At this point of time the concentration must be on maintaining (or increasing) market share for its products and services; achieving economies of production; modernizing  , and expanding production facilities; exploring new markets, and finding fresh avenues for raising finances.
Stage 3: The Growth Stage – This is the stage that all entrepreneur look out for – the business will have financially stabilized; a normal accounting, compliance and reporting system will be established; the business will be able to allot funds for research and product development; newer products will be considered for development and launch, and generally be able to face competition with confidence. A market research company is the right one to guide you through the growth stage since it will have all the data and help companies to make decisions based on the research.
Stage 4: The Maturity and Expansion Stage – The basic tenets of this stage is that the business has a series of product ranges that are firmly entrenched in the marketplace. It is also the stage where the business is no longer small and is well on its way to becoming an enterprise. It is now time think of budgetary controls, raising fresh capital and rationalizing procedures.
Seeking Expertise from Outside
Not all organizations will have all expertise in-house and seeking expert opinion and advisory form a business consultant company is a necessity for most businesses. Our Business Ladder is a speciality business consult company that focuses on market research for an existing business who want to up their game and start-up who want have a foothold in the market. As a market research company, we help businesses to mature through the 4 stages of business growth on a scientific basis.