Whether you’re kicking around a business idea or working through your first year, it’s never too early to start thinking about growth. After all, the goal of every entrepreneur is to grow a profitable business.
To make sure your business is slated for growth, start out with a detailed business plan. This document will serve as your road map for success. It will help you figure out exactly which steps you need to take to create an environment for growth.
In addition to referencing your business plan, you’ll also want to check out the list of business growth killers below. We asked Marc Meyer, a business professor at Northeastern University, who has also been part of several successful software startups, to talk about business problems that can inhibit growth.
1. Not Knowing Your Competitors
If you don’t know who you’re up against in business, you’ll have a hard time growing, Meyer says. Just about every business owner has a competitor, but if you don’t know what they offer and how they work, how will your product survive?
“Customers need a reason to switch and the only way they’ll do that is if you give them a clear reason,” Meyer says.
Bottom line? Failure to learn about your competitors and set yourself apart from them will halt your growth potential.
2. Poor Customer Insight
When you get into business, you need to know who your target market is, Meyer says. Are you selling to moms, or men with a fitness obsession? How often will these customers make a purchase from you? If your product is only needed once every year, you’ll need a lot of customers to make ends meet. You have to know your customers if you expect to grow.
3. Lack of Funds
You’ve heard the phrase, “You have to spend money to make money,” right?
Well, it’s true in business. You need enough money to make it through each stage of business. During your infant stages, you need enough startup capital to keep the business afloat until it starts making money. Later on, when you’re ready to expand, you’ll need another pool of money to reach a new or bigger audience.
If you don’t have money before you need it, your business won’t grow. Whether you borrow money or get investors to support you, you need money in the bank to go through successive stages of growth, Meyer says.
4. Making Decisions on Your Own, or “Winging It”
A lot of entrepreneurs start out with a team of one. That’s okay, but it’s not easy to start and grow a successful business all by yourself. You need some advice—some good advice.
Whether you get a business mentor, a business coach, or create a board of directors, Meyer says you need someone in your corner to bounce ideas off of, help you make decisions, and talk through problems.
5. Poor Leadership
If your business is big enough to have a management team, you want to make sure every member is willing to think outside of the box, energize the company, and be willing to take a few risks to grow the business.
“Growth stops if the leaders are either too rigid or incapable of envisioning a new stage of growth and aren’t breathing excitement and new energy into research, development, and sales,” Meyer says.
In other words, you need leaders with vision and the wherewithal to make that vision a reality.
6. Not Tracking Your Money
If you’re just paying bills and depositing what’s left into the bank, you’re making growth extremely difficult. After all, how can you grow if you don’t know how much money is going in and how much money is going out?
You need a good accounting procedure in place if you plan to attract new customers, reach new markets, and boost sales, Meyer says. Whether you hire an accountant to help you, or invest in a software like Quicken or QuickBooks, you need to track your money so you can plan for growth.
As a business owner, what has stalled your growth? Share your knowledge with others in the comment section below.