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Small business owners are faced with four common challenges when they are growing their operations: keeping up with the market, maintaining a positive cash flow, a growing work force and new compliance responsibilities, but if you recognise them early, you can act on them in time.
After successfully launching a business, your next step is usually expansion and while growth is necessary for your business to survive, it is accompanied by these four challenges, says Rikus Scheepers, managing director of Accisure.
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Scheepers says small business owners usually conduct plenty of market research into their competitors, customers and industry, but not much since then.
“However, business conditions are continually changing and if you want to secure sales and increase your customer base, you need to stay up to date by engaging in ongoing market research.”
He says you can search online for reliable, published information, reach out to suppliers and business partners, get your employees actively involved and speak directly to key customers.
“By gathering relevant information and creating an in-depth picture of current market conditions and how customer buying behaviour has changed, you can arm yourself with the latest insights to help you make more informed business decisions.”
Ask questions such as whether a product has reached the end of its lifecycle or if you need to introduce a new service to your offering. Scheepers says with current research to back your decisions, you will be able to consistently meet the demands of your growing, diverse clientele and stay a step ahead of your competitors.
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Good cash flow control is important for any business. Scheepers says when it comes to smaller companies, many fail because of cash flow problems, while cash constraints are also a big factor in restricting growth. If you have expansion plans, it usually requires an additional cash injection because you need to spend money to make money.
“You might be a very capable business owner but that does not mean you have a head for financial management. Hire the resources or outsource the requirements so that you can keep tighter control on spending, use business credit wisely, reduce costs and save money where possible.”
With the help of a business accountant or financial advisor you can also assess how to reallocate resources so it will not affect your core business operations or put together a financial plan to secure additional funding from an outside investor.
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Scheepers says most businesses start small, with just one or two people who take on all the responsibilities, from writing the business strategy to coming up with a name for the new company. As the business grows, enlarging the workforce becomes a necessity.
“Hiring new staff members takes the pressure off increased workloads, while these additional workers also bring a range of skills that your business needs to evolve. But having a larger, more diverse workforce introduces different challenges, such as more complex HR administration and increasingly disengaged employees.”
He advises to better manage the demands of your expanding workforce that you ensure you have an effective HR management system in place to streamline HR processes and increase your internal communication, focusing on company culture.
“Develop a comprehensive onboarding process for new hires and get the basics right by providing a good work-life balance, suitable benefits and competitive pay.”
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As your company grows in size, so does your obligations, from the Protection of Personal Information (POPI) Act to the Compensation for Occupational Injuries and Diseases (COID) Act and with a larger workforce there will be additional rules and regulations to abide by that you may previously have been exempt from, Scheepers says.
“Documents, policies and procedures can make you feel overwhelmed, but investing in the right tools, systems and resources will enable you to better manage more people and a larger volume of information, while ensuring your business is compliant with all the necessary regulations.”
He says there are also numerous benefits to outsourcing the administration of these tasks to a reliable service provider. “Not only do you reduce the possibility of paying large fines for non-compliance, but you develop a clear standard for how your business operates and you reinforce to your employees that your business is professionally run.”
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