The challenges of growth
When it comes to managing SME growth, there are a myriad of challenges to overcome. Here are some key factors that will definitely bring a wind of change to your organization.
1. DiversificationYou did it! You finally succeeded in breaking into the market with a flagship product or service. Now you need to make this unique product or service less vulnerable.
- Think about developing a range of products and services that will secure your sales figures.
- Move into other markets than the one where you first found success.
2. Effective recruitment and integration approaches
As it grows, your organization will need to continuously recruit new employees.
- Stop improvising.
- Implement a strategy for attracting talent, a thorough screening process, and measures to quickly integrate new talent into your team.
3. Quality controlGrowth is often synonymous with higher sales. Therefore, you may need to entrust or transfer certain tasks to new employees in order to meet demand.
- Set up control measures throughout the business process to keep the rejection rate and number of customer complaints to a minimum.
4. Cost management for improved gross marginsYou may go through a period of rapid growth that forces you to double your efforts just so that you can meet your production commitments.
- Take some time to stop and analyze how you can lower variable costs such as those for raw materials, labour and equipment.
5. DelegationThe more the organization grows, the more work it will take to keep it afloat.
- Find key employees who can take on bigger responsibilities.
- Try to contain your desire to control everything, want everything to be perfect and have everything done as fast as possible.
- Delegate as much as possible and focus on your organization’s sustainability.
6. Analytical tools and technologies for operationsAdvances in technology create a larger quantity of data that can become hard to manage. Naturally, to make well-informed decisions, you need the right analytical information at the right time. This information has to be correct, concise and thorough.
- Acquire technology tools that can crunch all these data.
- Don’t be surprised when the information you obtain changes your organization's direction and the course of things in the coming year.
7. FinancingQuite often, higher sales create higher operating expenses that need to be financed.
- Avoid a liquidity crisis by anticipating your financing needs. The right time to set up a real cash budget and present it to your banking institution is when your organization is solvent. You definitely do not want to miss out on growth opportunities due to a lack of liquid assets.
If you foresee a huge growth spurt in the next few years, you should invest in marketing.
- Work with an expert in the field and clearly determine the factors that set you apart in your target market.
- Choose strong strategic positioning and then communicate it effectively.
9. Middle managers with management and supervisory abilitiesYour first employees may be in charge of operations, accounting and sales. Despite their technical expertise, have you considered the possibility that they may have never supervised employees or managed an entire division of your organization?
- Assess their abilities properly so that you know if they are actually capable of assuming these responsibilities or offer them training to round out their skills.
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