This is the second part of this series. If you missed Part 1, then please go here first:
Now that you’ve decided that you want to grow your business, what will be the challenges ahead?
From experience, entrepreneurs are often faced with three obstacles when expanding their business.
We shall discuss each of them below, and more importantly, give a list of things that a business owner can do to overcome them.
Lack of Knowledge on How to Expand the Business
Growing your business is more than just getting a bigger space, or adding new products to your inventory. An entrepreneur can expand his business towards several directions and one must know which path is the most optimum for his goals.
Visualize and set optimistic goals
Creating SMART goals is important if you want to succeed, be it in your personal life, or in this case – your business. Ask yourself, what exactly do you want to achieve? Make your goals “Specific, Measurable, Attainable, Relevant and Time-Bound”.
Learn the legalities and regulations you will face
This is particularly important if you’re planning to add new products or services in your business; if you’re relocating your office or store; or pivoting to another business model.
One particular example I can share is my friend who runs a food catering business. She thought she can expand her reach by offering prepacked meals in corporate offices nearby (a new business model).
Instead of immediately selling her meals, she first did research and learned that there are administration requirements with regards to selling food in each office building. Had she failed to do that, she might have wasted time and money in cooking during the first day only find out she can’t sell the food inside the offices.
Inability to Scale Up the Business Processes
If you’re mostly hands-on in your business, scaling up such as putting a new branch, can be really challenging (and impossible at times). If you want to grow your business, then you have to…
Be willing to give up control in some parts of the business
You can’t do everything and you have to stop micromanaging your business. Delegate tasks and trust that your employees will do their best to help the business grow.
Document and redesign your business processes
All businesses, big or small, should have proper documentation on how everything runs. This includes employee manuals, supplier lists, financial records and other important information and vital processes that make up the whole business.
These documents are important if you want to scale-up or duplicate your business. Additionally, it allows you to create duplicates of yourself in the business, and saves you time in the hiring and training process when someone leaves, among other benefits.
Remove yourself as an employee in the business
The first two tasks above both contribute to your ultimate goal to remove yourself as an employee in the business. This way, you can focus your time in coming up with business growth strategies rather than managing the day-to-day operations.
When your business can run without you, then putting up new branches, or opening your business to franchising opportunities will be easier.
Lack of Capital to Expand the Business
In business, there will always be that perennial problem of needing more capital to expand. But there are three simple solutions to this.
Tap into your personal resources and bootstrap for funds
Not the most ideal solution, but it is certainly the simplest and fastest way to raise more money for the business. Be sure to consider all the risks involved.
Prepare your financial documents and apply for a business loan
Getting approved for a loan to start a business is hard; but when it comes to business expansion, securing a commercial loan is relatively easier, especially if you have the financial documents to prove that you have a stable and profitable business.
Create a business expansion plan and invite new investors
Tech startups are well-known for this strategy, but traditional businesses have successfully implemented this strategy in the past and even until today. The terms “venture capitalists” and “angel investors” exist because they are out there, just waiting for you to make a pitch.
Now that you know the common obstacles that entrepreneurs face when growing a business, it’s time to actually learn the different ways how a business can expand.
You’ll learn that plus a few final tips in the third and last part of this article series. Be sure not to miss the conclusion by subscribing to Ready To Be Rich.
Growing Your Business Series:
- Reasons For Expanding Your Business: Growing Your Business Part 1
- Overcoming Obstacles in Business Expansion: Growing Your Business Part 2
- How To Expand Your Business: Growing Your Business Part 3
SELECT AN ARTICLE TO READ NEXT BELOW: