Unexpected Capabilities. Unmatched Service.
scaling your business challenges

Scaling Your Business: Financial Challenges and Solutions

Most small businesses have the same goal: grow. It doesn’t happen overnight, of course — scaling your business takes not only time, but also overcoming the challenges that arise as your company expands.

But let’s be clear: These are good problems to have, and you can indeed tackle them.

Read on as we explore five common challenges that commonly come with scaling your business, as well as how to solve them.

Challenge #1: Managing Increased Workload and Complexity

As your business scales, you’ll need more resources, systems and personnel. Hiring and managing larger teams, increasing production, and dealing with more complex operational processes can quickly overwhelm you.

Solution: Optimize and Automate Processes

Process optimization and automation tools can streamline your workflows and eliminate some bottlenecks. For instance, implementing an enterprise resource planning (ERP) system can help to centralize various parts of your business, from inventory management to financial tracking. When you automate repetitive tasks, you free up precious time and resources, allowing your team to focus on high-value activities.

Challenge #2: Sustaining High, Consistent Quality

Not only does bigger not necessarily equal better — sometimes it can make better even more difficult to achieve, certainly on a consistent basis. That’s because, as you expand, it’s harder to oversee many aspects of your business. That includes production, customer service and product development.

Solution: Establish Quality Control Protocols

In short: You need to set up clear procedures and quality-control protocols that any employee can use to ensure consistency across your business. But you have to follow up on these protocols. That means regularly conducting audits, evaluating employee performance and implementing feedback loops so you can determine what’s working — and improve what’s not. Also consider investing in employee training programs so your team has the tools they need to keep your brand quality elevated.

Challenge #3: Financial Strain and Cash Flow Management

Scaling requires capital investment — you need to pay to expand operations, develop new products and hire personnel. But sometimes the cost of growth outpaces the new revenues being brought in. That can create a small business cash-flow crunch.

Solution: Optimize Cash Flow and Secure Funding

Creating cash flow forecasts can help you anticipate potential shortfalls and efficiently allocate your resources. Consider establishing lines of credit or securing short-term loans to bridge temporary gaps. You also want to look at small business financing options, such as angel investors or venture capitalists, to infuse your business with the necessary capital for growth.

Challenge #4: Adapting to Market Changes and Competition

As your business scales, it will enter new markets … and attract more competition. It can be difficult to both deal with changing market dynamics and maintain a competitive edge.

Solution: Continuous Market Research and Innovation

The only way to stay ahead of industry trends is to hit the books, so to speak. That is: Do your research. Market research — monitoring customer preferences, emerging technologies and industry developments — will help you identify opportunities for innovation. And be agile: When you encourage your team to be innovative and creative, good things can happen.

Challenge #5: Talent Acquisition and Retention

Scaling requires a skilled workforce, but small businesses can struggle to both hire top talent and keep employees happy given lesser resources compared to larger corporations.

Solution: Build a Strong Company Culture and Invest in Employee Growth

A positive and inclusive work environment can attract and retain top talent. But ultimately, you can’t cheap out on employees if you want a workforce that can push you forward. You can make your compensation more competitive by offering performance-based bonuses, and you should provide at least basic benefits such as insurance and retirement plans. Once you have skilled workers on board, make sure you keep investing in them, offering them training programs and helping them find mentors. That way they’ll know you’re committed to their professional growth.

Scaling Solutions You Can Trust

Scaling a business is a transformative journey — but one that comes with a few growing pains. But you don’t have to deal with those pains alone.

McManamon & Co. offers a broad spectrum of consulting services that fortify our clients’ businesses and keep them operating on the highest level. That includes helping businesses tackle the challenges that pop up as they scale up.

Reach out and find out what we can do for you and your business! Just call 440.892.8900 or contact us online.

Tags:  , , , , | Posted in Consulting, McManamon & Co., small business