The 5 biggest barriers to business growth

Martin Jones, July 16th, 2015

One of the biggest challenges almost all businesses face at one stage or another is ensuring that they grow continually. When many business owners start a business, their sole focus is understandably on generating new customers. However, it is essential not to neglect other aspects of the business, such as having quality, scalable systems in place and taking a more strategic approach to running their business. Below we look at five key factors that cause barriers to growth, and how you can overcome them:

1. Not having the right systems in place

Businesses usually have one of two problems with their systems; either they don’t have the appropriate systems in place at all, or they don’t have systems in place that allow the business to scale rapidly. Systems can cover almost every aspect of your business, from how salespeople sell your products and/or services, to how orders from your customers are processed and handled.

Templates are another great way to systemise your business, and again can be very valuable in many different areas. There are many free resources available online, you can look at Project Management software such as Basecamp, but if you are having particular issues in this area, it may well be worth consulting with an expert.

 

2. Not having the right people in place

This can be especially difficult for businesses that are starting out and trying to ‘bootstrap’ their way to growth, but having the right people in place is essential. In the early stages of a business, and often for too long, the business is run by a very small team of 2 or 3 people who are trying to fill a dozen different roles. This causes two problems. First, it inevitably means that they spend too much time on low value, low return tasks. Second, it also means that some of these different tasks are not completed to a high standard because one person can’t specialise in several different areas.

Hiring the right people early can help to solve this problem, and the likely scenario is that as you grow, you can hire more experts, whereas in the early stages you may well require people with slightly broader skillsets.

 

3. Lack of Strategy

As we briefly touched upon in the first paragraph, it can be very easy for young businesses to focus ruthlessly on the acquisition of new customers. Years ago Arthur H. Motley said, “Nothing happens until someone sells something”, and whilst this is true, it’s very important to have a broader strategy in place. There are many benefits to having a clear strategy for your business, including highly satisfied customers, a stronger proposition in the marketplace, and more engaged staff.

There are many different articles and resources about creating a business strategy, and without going into too much detail, one thing all great businesses have in common is that they have a clear vision and mission statement, and ensure that all decisions, big and small, fit into that strategy. This should be a business strategy that fits in with your goals and aspirations for the business. Note: This is not suggesting that you have to plan every element of your business, but you should have a robust yet flexible plan and strategy in place.

 

4. Not marketing

Almost the antithesis of point 3 is that it can be easy to become complacent with your marketing once you think things seem to be getting ‘busy’ and/or you seem to have a reasonable stream of new customers coming to you. However, this can be a dangerous strategy, particularly if you are reliant on one or two channels for customers. There are even cases of more established businesses working very much on a ‘feast or famine’ basis, meaning they do lots of marketing when they are quiet, then get very busy and neglect their marketing until they get quiet again!

The best approach here is to create marketing systems that allow you to market to your target audience on a consistent basis, and to constantly be diversifying your sales and marketing channels so that if you have a problem with one or two, you still have new customers coming in from other sources. Another important point to make is that whilst personal referrals are great, it’s very difficult to sell your business if you’re completely reliant on them, because your lead generation disappears as soon as you leave the business!

 

5. Not closely monitoring their numbers

Whilst you can be extremely granular in monitoring the numbers in your business, many business owners do not even regularly monitor their profit and loss accounts, their profit margins, or even basic costs (and changes to costs). This can be an extremely big problem leading to bankruptcy in some cases. Whilst a good accountant will help you keep on top of your numbers, it is very important as a business owner that you also take responsibility and have a strong and regular handle on your own numbers too. In recent years we’ve seen the proliferation of accounting and bookkeeping software, and whilst this can be a fantastic tool, it’s important not to place too much reliance or emphasis on this software. Remember that it is only as good as the data inputted into the system and quality decisions can only be made as a result of analysis of good quality output.

 

How we can help

Partner Martin Jones has been a qualified accountant for over 25 years, running his own businesses. Martin acts as a sounding board for his clients and specialises in helping businesses to resolve their growing pains. If you would like to speak to Martin about how he can assist with your business, you can call him on 0207 292 8850 or email him at martin.jones@kinglybrookesllp.co.uk.