More than 55% of startups fail after just 5 years of doing business. That’s why it is very important for entrepreneurs to recognize problems that are keeping their companies from growing and do everything that’s necessary to bring them back on track.
Problem: Lack of Finance
Business growth requires more funding that should cover bigger production or higher demand for company’s services. If companies don’t have enough money to invest, this may result in overtrading, and leave disastrous consequences on their future growth.
Company management needs to find ways to reach investors and receive more funding that will enable them to answer customer’s demands. Before reaching investors companies need to do some “spring cleaning” in and around their offices and production lines and cut off all inefficient and uneconomic sectors. In recent years, soft or crowd funding became an alternative to classic funding, and it is especially applicable to businesses that developed innovative, socially responsible and highly useful products
Problem: Losing A Major Client
Small businesses often rely only on one big client and cease cooperation with smaller ones, after big order arrives. Since in this day and age companies tend to grow and fail much faster than before, big client’s financial or any other problems might reflect company’s business in a bad way.
Company should always have several clients, no matter how big their orders are. It should also cooperate with one or a few of its rivals and send them all extra orders after reaching the norm. Although this doesn’t sound too economical, it is the price that every company needs to pay for maintaining diversified portfolio, which guarantees security in business world. Plus they will earn the respect of their rivals, which can result in getting extra orders their rivals weren’t able to answer.
Problem: Lack of Staff
Due to small funding, startups often have much less employees than they really need. This makes their business slower and less efficient and stops company’s growth on the long run.
Although most entrepreneurs tend to solve this problem by finding the way to increase employee’s productivity, or by multi-tasking and working harder themselves, this is definitely not the solution that supports further business growth. Digital age gave us growing freelance and outsourcing economy and a chance to hire top industry professionals for very moderate prices. Freelancers and outsourcing agencies can be hired on regular bases, or only when there’s a need for some specific service, and most of them are both skillful and cost effective.
Problem: Ineffective Marketing
Company’s inability to find customers can lead to low number of orders, and large business decrease. Even companies who spend a lot of money on marketing can have low conversion rates, because their marketing efforts weren’t directed towards the right audience.
Targeting the right audience became much easier in Digital Age, when Google and different social network’s ad managers can be used for this purpose. With these advanced marketing tools audience can be easily targeted with information collected on their social media profiles and with website cookies.
Problem: Inability to Recover Debt
When it comes to debt recovery, most experts advise entrepreneurs to stay away from bad debt. Unfortunatley it is very hard to single out bad debtors from huge number of business partners and customers, company is dealing with. This is especially hard during the initial phase of company development, when entrepreneurs are not experienced enough to deal with this matter.
Debts can be collected by creditor or by the third-party agency. Second option is always better when it comes to bad debts. Although one part of the debt will be taken by the debt collector, hiring a debt recovery agency will keep entrepreneurs occupied with regular company work, instead of worrying about debt collecting ending up in court.
Constant growth is the most important characteristic of every successful company. Entrepreneurs that want their business to grow need to provide all necessary conditions and resolve all the issues, before they become major problems.