7 Factors Impeding the Growth of Your Business
Starting a business is an exciting opportunity for entrepreneurs and innovators, but if you want to be successful long-term, you need some way to grow the business. For some entrepreneurs, that means investing in expansion, reaching new geographic areas and demographics. For others, it means increasing sales and revenue by introducing new products and services.
Either way, growth is one of your biggest priorities. But there are many factors that could feasibly impede your ability to grow to your full potential.
These are some of the most significant factors that stifle business growth:
- Lack of capital. One of the most common reasons for business failure is a lack of available capital, which can also hinder your ability to expand the business. Almost every outlet of growth requires some level of capital investment; for example, you might need to lease a new building to expand your business physically, hire new people to upsell your existing clients, or hire engineers and developers to create a new product. If you aren’t able to raise this capital from an investor, shareholders, or a line of credit, you might find yourself at a standstill. Fortunately, there are many fundraising options available to you if you’ve led a profitable organization thus far (and have a solid plan for the future).
- Obsolete software. Though it may seem like a minor factor in your organization’s overall efficiency, obsolete software can cripple your team’s effectiveness. For example, the average business is two generations behind on updating their enterprise resource planning (ERP) software. That means four years or more of missing updates and new features that could otherwise help a business improve its efficiency. Software has the power to automate and improve virtually all your business interactions, so without the best-in-class software, you stand to lose significant productivity.
- A status quo mentality. Many high-ranking business-people are plagued with a status quo mentality, leaning toward keeping things the same for as long as possible. If your organization’s directives and processes have worked well thus far, you’ll be reluctant to change them. Unfortunately, change is the only way to work toward growth. Challenge the status quo bias afflicting your organization, and you’ll be much more open to new ideas that can help the business grow. Everyone has to be willing to make sacrifices, and potentially put themselves in a new, uncomfortable position.
- Unfocused team members (or ambiguous goals). “Growth” is a general idea, but to achieve it, you need to have a specific target in mind (e.g., higher per-customer sales, more customers, or a presence in a new area). If your goals are too ambiguous, or if your team members aren’t unified in their vision toward achieving your main directives, it could result in stagnation for the entire team. Spend time ensuring everyone is clear on your high-level objectives.
- Insufficient research. Brainstorming and guesswork can only get you so far. Just because you think a new product or new directive will improve your business’s bottom line doesn’t mean it will. Your ideas have to be tested with objective research, which can come in a variety of forms, including surveys, demographic research, and retrospective analyses of your past efforts. If you aren’t researching enough, if you aren’t researching in the right ways, or if your research is affected by cognitive biases, your ideas for growth may not play out successfully, or may result in harm to your brand.
- Internal inefficiencies. Any glaring inefficiency from your team could result in delayed or interrupted growth. For example, if you rely on an excessively bureaucratic chain of approvals to make decisions, it will be harder for you to execute on your latest ideas for business development. If you hire a questionable manager to oversee the creation of a new store location, you might not end up with an efficient operation. Internal inefficiencies come in many varieties, and range from mild to severe, so it’s hard telling which ones will affect your expansion and which ones are relatively harmless.
- Regulatory or logistical hurdles. Depending on the nature of your business, you may face significant logistical or regulatory hurdles that impede your growth. For example, in the tech world, new laws and regulations could prevent you from developing certain technologies, or may impede your ability to distribute your products the way you want. You may also struggle to find a suitable location for your new branch, or have a hard time finding the right talent to develop new products at a favorable pace.
Identifying and Overcoming Obstacles
Half the battle is simply recognizing which obstacles are standing in the way of your business’s long-term growth. Once you’ve managed to do that, you should be able to draw up a plan for improvement. Correcting or accounting for one or two obstacles may not be enough to spark faster growth in an organization that’s already struggling, but upgrading your systems, your goals, and your resources in multiple areas should cumulatively give you the power you need to continue expanding.