As an entrepreneur, your startup enters a new phase when your business faces the?numerous crises that arise from business growth. For your business to handle the new?influx of demand for your product or services, it needs to expand to survive. Old solutions,?familiar ways of doing business, principles and processes will no longer fit the bigger?challenges.
A New Stage in Doing Business
Essentially, business expansion means two things: opportunity and danger.
On one hand, it is exciting because everyone can prosper?business owners, strategic?partners, and employees. It also validates your original entrepreneurial vision and?inspiration for starting the company in the first place. Your efforts behind-?the?scenes have?come to obvious fruition in the marketplace.
On the other hand, it can also become overwhelming, disrupt business processes that?have worked well, and introduce unexpected constraints. If mismanaged, rapid business?growth may result in confusion, mayhem, and costly financial blunders because a large?number of new issues have to be quickly resolved for the business to succeed in this new?stage.
The Best Mindset to Handle Business Growth
Ultimately, everything in business boils down to a simple equation: the right mindset?equals success. Conversely, the wrong mindset is the road to reversals and failure.
The right mindset can be simplified to two simple management principles:
- You must understand the most meaningful factors that have led to the success of your?business and protect them during the new phase of expansion.
- You must identify the constraints in your business and remove them because these?bottlenecks might sabotage your business growth.
The use of effective management, strategic thinking, valid tactics, and profit forecasting?will help you to handle these two critical elements of your business. In other words, in?order to be successful, growth has to be carefully planned.
Challenges Created by Growth
There are at least 7 challenges a company may face as it prepares to cope with business?growth:
1. Growth cannot happen without change, and this change impacts finances, legal?matters, and managerial policies.
2. Growth puts employees in a position where they need to rely on strong leadership to?understand their new functions and expanded roles in the company.
3. Growth can often mean setting up new branches in another city, another state, or?another country; and this means that management will become increasingly?decentralized.
4. Growth destabilizes established psychological patterns and can lead to internal politics?and dissension among key executives on the best projects to pursue.
5. Growth affects market share, expanding it. This results in seeking new partnerships,?finding new vendors, or developing new strategies to cope with bigger, fiercer?competitors.
6. Growth may mean housing a lot more inventory. Fortunately, there are logistic?companies that can assist with supply chain functions. A company like Unigroup?Logistics, for example, is familiar with providing integrated support for storage and?distribution services for rapidly growing companies that need quick solutions to stay?competitive in the marketplace.
7. Growth requires the injection of new capital into the business and will require creating?new relationships with banks and lenders, investors, and shareholders.
Expect Myriad Changes
Essentially, then, business growth stimulates rapid change that often appears to be?happening at the same time. As a company reinvents itself to fill a larger role in the?marketplace, it must handle changes that impact its objectives, structures, and?operational needs.