The potential for growth is what almost all small-to-medium businesses (SMB) have in common. Every small company has a larger potential for faster growth and development, but that growth has to be managed properly. Still, growth is elusive for many small and medium companies, and they fail to achieve their growth goals in profitability and revenue. However, whenever an organization has a strong execution infrastructure backed up with a clear growth strategy, the chances of achieving profitable growth are heightened. The probability of success is impaired if one exists without the other.
There are two major reasons for growth being so unattainable to SMBs:
1) If the organizational structure of a company cannot support successful execution, and
2) If the consideration of opportunities within the core business is inadequate, adjacent within new customer sub-segments or to the core business.
Nonetheless, not everything is lost. There are certain moves managers can make to improve the chances for success. Namely, they can build a systematic framework of clear growth strategies and elements crucial for successful execution.
- Plan for real
Do you know the main purposes of business planning? One of those purposes is to have a long-term plan to present to potential investors. The plan has to be realistic, and that is where many entrepreneurs make a mistake. They create their business plans that are often too ambitious to be executed in the real world, solely for the purpose of fund collection. Avoid being blindly-optimistic or too aggressive, because it can cause you a variety of serious financial problems somewhere down the road. What should your business plan look like? It should be:
– Easy to read – it should not require any long elaborations or additional sources that are difficult to understand because it is intended for company managements and investors to read.
– Specific – methods and strategies that should be used for achieving specific goals should all be included in it.
– Realistic – goals that are defined in the plan should be achievable.
- Nurture management for success
SMBs usually find hiring management experts to run separate company units (such as human resources, production process, and finance) not possible due to their very limited budget. So what do they do instead? They hire managers with less experience and provide them with necessary training. However, hiring a trainee for a managerial position would actually be much more affordable than hiring top industry experts, as well as using services of different outsourcing agencies as additional sources of expertise. In a year or two, your company could develop an expert manager who will also be much more loyal to your company.
- Always recover your debts
Use all means available to collect your debts before settling them in the court of law. Entrepreneurs who manage a small or medium enterprise usually find this to be an unpleasant experience. Start by carefully looking at your collections process and Accounts Receivable invoice, in order to identify where hides the slowdown in your process. If you have troubles collection debt from your clients, try using debt collecting strategies such as:
- Negotiation, which sometimes means prolonging deadlines, offering discounts, and understanding the debtor’s difficult situation in order to collect debt;
- Reminding the debtor of his late payment by phone calls, e mails, and sending reminder bills
- Seeking help from Sydney-based debt recovery agency to recover debts from debtors who avoid contact.
- Terminating the business relationship until the debt is settled.
- Consider all funding options
Being able to rely on different cash sources at any time is an invaluable asset to every company, no matter what size it is. Small and medium enterprises usually fail due to lack of funding. Always search for other funding options when investors fail to recognize the potential of your business. Probably the best way to collect enough money to start a business is crowdfunding. It is usually free, and companies which succeed to have their projects funded through crowdfunding have little or no problems with selling their products, because crowdfunding is based on consumer recognition.
Educate yourselves and your employees about the challenges your business will face during the growth process. Adapt to your environment, define goals, make realistic plans, use the latest technological achievements that can help your business to advance, and always collect your debts on time in order to maintain your company’s liquidity.