If there’s one thing almost all small to medium businesses have in common, it’s their potential for growth. A logical implication when considering the size of a company is that the smaller it is, the faster it could develop and grow. Periods of growth can be tremendously exciting for a business, but managing that growth can bring challenges. In order to overcome the obstacles before them, entrepreneurs must pay attention to the day-to-day aspects of running a business, while at the same time thinking big to create new and meaningful ways of rising above the competition. Managed the right way, small business can quickly turn into flourishing enterprises. There are thousands of success stories out there, and in this article I’ve listed some ways to get past the challenges and onto the growth with your company.
Plan for Real
Many entrepreneurs make a mistake in creating a business plan only for the purpose of fund collection, and their plans are often too ambitious to be implemented in the real world. One of the main purposes of business planning is to present the project to potential investors, but the plan itself should be realistic. Being too aggressive or blindly-optimistic can lead to number of serious financial problems down the road.
Find the right business plan for your organization. A business plan needs to be:
- Realistic – each goal defined in the plan should be achievable;
- Specific – it should include all strategies and methods that should be used for achieving business goals;
- Easy to read – business plan should be read by both investors and company management and therefore it shouldn’t require any additional sources or long elaborations that are difficult to understand.
Seek all Funding Options
Lack of funding is one of the most common reason why small and medium enterprises fail, even though the digital world widens the types of funding available to entrepreneurs. If investors fail to recognize your business’s potential, you can always search for other means of funding. Taking a bank loan is very effective, but also the riskiest way to finance your business, because it ties business success to your personal finances. Crowdfunding is another very effective way to collect enough funds for starting a business and it is free in most cases. The whole concept of crowdfunding is based on consumer recognition, which means that companies which succeed in collecting enough money for their project usually don’t have problems with selling their products in the future, because crowdfunding campaigns serve as a good test of business’s potential.
Be an Accounts Receivable Jedi
Debt collection is one of the most unpleasant experiences entrepreneurs have to go through, when trying to manage small or medium enterprise. To start, you should look at your Accounts Receivable invoice and collections process carefully, to identify bottlenecks in your process. Often, managing invoices using manual or paper-only processes can create issues on your side, and there are definite benefits to migrate your workflows to digital. When you’re having trouble collecting payment from a client, your debt collection strategy should include:
- Frequent contact with the debtor, which includes e mails, phone calls, sending reminder bills by mail, etc;
- Discontinuing all services provided to debtor until the debt is settled;
- Negotiation, unfortunately sometimes understanding the debtor’s situation, offering discounts and prolonging deadlines is the only way to collect debt;
- Contacting professionals and asking for debt recovery help if needed.
Rule of thumb here is that entrepreneurs should always try to recover their debts by all means available, before settling the debt in the court of law.
Nurture Management for Success
Small companies usually have a very limited budget, which means they are unable to hire top management experts to run separate units, like: finance, production process, human resources, etc. Most small companies address this problem by hiring less experienced managers and providing them with extensive training. It’s much more affordable to hire a trainee for a managerial position and use outsourcing agency services as an additional source of expertise, than hiring top industry experts. This way, within a year or two the company could develop an expert manager in their ranks, with expertise in the business model implemented within the organization. Experts like these are also much more loyal to their companies and more resistant to rival offers.
Entrepreneurs can make their road to success much less stressful primarily by educating themselves and their employees about the challenges they will face along the way. Adapting to your competitive environment and to the latest technological changes is critical to keep your business moving forward, establishing a solid reputation in your industry. Constant drive for improvement and innovation will create an ability to quickly respond to any market-dictated changes and gradually shield your business against many vulnerabilities.
For more tips on how to manage business growth, visit xerox.com/smb.
About the Author
John Stone is a business consultant and regular contributor to Bizzmarkblog. A believer in the notion that thinking outside of the box is a prerequisite for being a successful entrepreneur.
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