No matter your entrepreneurial and leadership experience, you are going to face some challenges as you grow your business. All small businesses tend to share some common growth challenges depending upon their level of maturity.
Here are small business struggles at different stages of maturity from Start-up to Exit. Some struggles are common at all stages. Some challenges are very unique, like in the Exit stage. Acknowledging the challenge and focusing on it, is a key part of the solution.
Common Struggles for Each Stage of Growth
Time Management
At all stages of your business, you will struggle with time management. There is only so much time in your day and your life. 
We need to focus our time on what we do best, what is important to our business and what we individually enjoy most.
As small business leaders, we need to learn to delegate work. You have a virtually endless workload. There is always something you could be doing. As a result, you need to become good at understanding where you should focus your time and efforts. You need to become excellent at delegating work to your team, resist doing tasks that are not worth your time, and focusing your efforts on scalable, growth-oriented tasks.
Financial Management & Reviews
Another challenge all businesses continuously face is maintaining financial control and establishing on-going financial management. Most established small businesses understand the value of disciplined bookkeeping and regular financial report reviews. However, some new small business leaders either ignore or delay implementation of their bookkeeping system because they are overwhelmed or just don’t address it until there’s a problem. It is much easier to put a good financial management system in place while a business is small and new. Starting early also shapes the focus of the business direction and staff attitudes while re-enforcing good team habits.
Develop a good bookkeeping system early on in your business. You can then use your bookkeeping data to assist you in making key business decisions. A robust bookkeeping system will help you scale your small business no matter its stage of maturity.
Pre-Start-up Phase
Taking the Leap
One of the biggest struggles you will face before you launch your business is making some tough choices and reaching a decision to proceed. This stage will often create an analytical challenge and mental struggle. Where do I focus? Who is my customer? Can I compete and win? You will have big dreams and occasional nightmares. Failure rates are high yet independence is sweet.
Raising Money
Sometimes you can get your business off the ground without much startup capital. However, with most small business startups, you need cash reserves. Raising money is a non-trivial effort. To launch your business, often you need to bootstrap it, invest your own time and money or have an angel investor (family or friend) provide capital. In any case, you need to think through these steps and be prepared.
Start-up Phase
Finding Customers
Once a business is launched, one of the first challenges you will encounter is finding prospective customers. Even with a great product or service, building awareness and proving you can meet customer needs is a significant effort and investment. Then, as you become good at attracting prospects to your business, you’ll need to develop a repeatable and scalable way of converting prospects to customers. Marketing and Sales functions are critical at this stage.
Managing Cash
Another challenge you will face in the start-up phase is cash flow management. As you grow your business, you need to find a balance between generating cash and spending it. You can’t grow without investing in your business, so you must become excellent at managing your cash flow. Even with a great concept, running out of cash is what makes running a small business so difficult and causes such a high failure rate. Sales forecasting and investing cash wisely will be critical competencies for success.
Growth Stage
Finding and Retaining Top Talent
Getting beyond the Start-up phase is quite an accomplishment. Take time to celebrate! At this point, you begin to face a whole new set of challenges. Finding and retaining top talent in one of those key challenges.
As your business reaches the growth stage, you will start to experience some success and, at the same time, have experienced some key staff turnover set-backs. You will likely experience the on-going effort required to find, interview and bring on critical hires. At some point during this stage, it becomes clear that treating customers and employees extremely well are -both- very important.
Scale your Business: Organization and Process.
As your business grows, so will your staffing, key roles and aggregate workloads. As they say, you need to be “on top of your business”. To handle all the work efficiently and effectively, your business needs to be organized so key tasks may be measured, managed and scaled. Your critical processes will need to be defined sufficiently so that new staff and the whole team can see how you have chosen to execute growth plans. Markets change, products evolve and competitors shift. Make sure you revisit your organizational chart and process flow often and update it. Ensure that every role on your organizational chart has a clear and current job description that is aligned to the chosen growth strategy. Engage all staff to support the chosen organization, changed processes and the overall growth effort.
Maturity Stage
Adding New Markets, Products or Sales Channels
Over 80% of small businesses fail in the first 2 years. If your business makes it to the maturity stage, then congratulations — you should feel like a success. As your business matures, you -really- only have a few options: harvest cash from what you have, continue to grow organically or exit the business.
If you decide to continue to grow, you will most likely have to attempt to pursue one of three directions:
- find a new set of customers to buy your existing offerings,
- develop a new product or service to sell to your existing customers or
- engage a new sales channel to sell within your core business.
Growth is difficult for any small business that has gotten this far and achieved success. Often, responding to necessary change or shifting competitively is required early and decisively. At this stage, a business may need to adapt to these market developments quickly and with urgency.
Exiting the Business
In the maturity stage, many businesses will try and execute on some sort of exit strategy. Many small businesses fail to create an exit plan or they think about it much too late in the life of their business. An exit needs to be developed at an early stage to provide an end goal.
Many small businesses have a vague exit plan yet won’t develop that plan with enough clarity because they struggle with on-going challenges of the business. It is difficult to develop details in an exit plan when you have uncertainty. Yet, an exit plan keeps your business aligned with success and will help you recognize when it is time to cash out.
In an analogy, your small business is like flying an airplane. An exit tells you where your plane will land and – at the same time – you are building and flying the same plane that you will be landing!
What challenges are you facing? — How can we help?
Focus on what you do best.
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About Doris Cristiano & YourBizManager.
As an independent bookkeeper, Doris has been providing flexible business services in Santa Monica and West Los Angeles since 1997. To support Clients’ needs and growth, YourBizManager tailors its services to each unique business situation and works closely with client at their business or home office.
