Article provided by The Transformation Legacy
Starting a business can be the most thrilling and challenging thing one can do. This is a time when a dream is coming to life, a solution is finally put together and commercialised, and a passion is turned into a business opportunity. This stage of starting a business is full of all kinds of uncertainties: not being known by your target market, trying to define exactly what you are selling, finding clients, raising funds for the business, finding business premises, not having enough money to cover all the expenses of the business, and so the list goes on. Many entrepreneurs are excited at the idea of finally overcoming this stage in their business and moving to a stage of growth and market expansion.
Transitioning from the start-up stage can be one of the most exciting processes that entrepreneurs experience in their businesses. This process is characterised by finally having a solid client base, a brand that is recognised by its target market, a specific loyal clientele, a well-defined product or service offering and a profitable business. With all these things in place and the prospects of growth in the business, what could go wrong?
There are a few things an entrepreneur should be aware of when the business finally starts to experience growth. Every stage of the business comes with its unique set of benefits and challenges. Some of the challenges entrepreneurs can expect when they enter into a growth stage are as follows:
1. Finding the right people
As an entrepreneur, you are the most valuable asset in your business. The success of the business depends on the quality, competence and skill that you possess as the leader of the business. However, when the business grows, the focus shifts from the entrepreneur to the team within the business. The people in your business are your most valuable assets and can make or break your business. It is, therefore, important to find the right calibre of people to add value to your business. It can be challenging to attract the right calibre of people in your business, but if you know what to look for, you can get it right. The following should be considered when setting up a team:
- Find people who have the relevant skills to perform their duties or someone with the potential and capability to learn quickly.
- Understand the culture you are trying to establish in your business and find someone who can easily blend into your culture and further enhance it.
- Understand the values of the potential team member and see if they align with the values of the company.
- You need a self-starter, someone who can take responsibility for their role and doesn’t need too much handholding. As a growing business, you may not have time to train people or micro-manage. Therefore, it is important to find people who can take responsibility for their work and are naturally self-motivated and self-sufficient.
- Conduct thorough interviews; all interviews should follow a five-step process. Think of hiring as making an investment, when you do this, you want to make sure that your investment will yield the anticipated returns and even more. So, this process is extremely important. The five-step process involves the following:
- Conducting face-to-face interviews,
- Practical assessment to be administered: This would involve giving the candidate real-life tasks that they need to perform. This will show you how your potential candidate approaches problems and whether they have the relevant skills and competency,
- Personal assessment: Get the potential candidate to complete a personal assessment. It’s important to understand the character of the person you are bringing on board. There are various personal assessment tests you can use to do this; some are free, and some are charged. If you go online, you can try out a few and see what would work best for you,
- Reference check: Perform checks to see whether the information provided from the interviews ties up with what they’ve done before,
- Conduct a final interview with your current staff members or an external party. This will assist you in getting a well-rounded view of the candidate and to see whether they can blend into the culture you’re trying to build.
2. Having adequate systems and processes
Growth comes with higher demands for your products or services and with that there is a need to ensure that there is consistency in your offering, the quality is maintained and the expectations of clients are met. You as the entrepreneur will have less time and may be unable to oversee every single transaction in your business. To ensure that you can sustain, support and enhance your growth you need to have solid policies, processes and systems. Have a clear outline of how things are done from the time a client requests a quotation to the time the product or service is delivered. This does not have to be a complicated process; you can write down how you are currently delivering orders to your clients. When you do this, make sure that every single step is noted. Your team must be trained on these processes and follow them consistently to ensure service levels are not compromised.
3. Monitor your cash flow
This is one of the challenges that come with growth. The more demand you have, the more cash you require to fulfil your demands. It is very important to manage cash flow effectively to be able to continue providing good quality service to your clients. Some of the things you can implement are as follows:
- Have shorter payment terms with your clients: Negotiate shorter payment terms with your clients.
- Extend your payment terms with your creditors: It’s important to negotiate longer terms from your suppliers.
- Start saving: It’s important to start saving money from the time you start operating your business, even if it’s small amounts. These funds you can use as and when you have to fulfil new orders.
- Have a budget in place so that you can plan for your expenditure: It’s also important to evaluate your actual expenses against your budget.
Conclusion
Going into the growth stage does not have to be daunting. If you prepare well for this, you can continue to reap the rewards of your hard work and enjoy this new stage in your business. The key thing is to plan for your growth and anticipate exactly what you will need to support this stage in your business.
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