Taking your business from the start-up phase to becoming a medium-sized enterprise is a pivotal step for many entrepreneurs.
If you are at this stage, congratulations! You have succeeded where many others have failed, and you are potentially on your way to becoming a very successful company.
The path from small to medium business is not always smooth, but there are ways to plan ahead.
Here are a few of the challenges that you may face as you take this new path and some suggestions that you can use to overcome them.
Challenge 1: Not vetting your clients or suppliers
It is common to become so excited about your business growth that you can neglect to ensure that your clients or suppliers are also ready to take this next step with you. Before you start offering credit and stock to your clients, you need to make sure that they have a past record of paying their bills on time.
As a newly expanded business, a few unpaid or late invoices can break you – you need to be wary of clients with poor credit scores. Encourage your clients to check their credit scores.
Challenge 2: Going too fast
You are motivated, excited, and driven. However, even if you are a savvy entrepreneur with proven results, you may not be ready for an expansion. Consult with a lawyer, a fellow business owner, and your partners to make sure that you aren’t stretching yourself too thin before you are ready.
Some key things to think about include: are you financially capable at this time? Will you really benefit from expansion? What type is best for you? Unless you have clear answers to these questions, you are probably not ready for this step.
Challenge 3: Not prioritizing your proven clients…
Your existing clients are your bread and butter; they pay your bills and keep you above water. You may have upon a large sale or order now and then from an unknown client, but you can always depend on your regulars to keep making orders and needing you.
Keep your regulars satisfied and make sure that you do not forget about their needs during a busy time.
Challenge 4: …Or not prioritizing finding new business!
But can you really rely on those regulars all the time? The business world is littered with stories of small to medium enterprises that put all of their eggs in one basket and didn’t attempt to diversify and find new clients along the way.
While your regulars are important to your success, now that you are growing, you need to also prioritize finding new business. Network, advertise and seek new clients online.
Challenge 5: Not having suppliers who grow with you
You may have been working with the same niche suppliers since your humble beginnings, but before you take this next step, you need to know that your suppliers are ready to take this step with you.
Moving forward and attempting to stick solely with your original suppliers is an honorable choice, but be sure that it makes sense.
Business growth will surely present at least some or all of the challenges above – but with careful planning and consideration, there’s no reason why you shouldn’t successfully transition from a small early-stage start-up to a fast-growth and more established business.
Experienced CPA firms like Williams and Kunkel, CPA, LLP CPA can help you grow your business in a sustainable way, so call us today in Flower Mound at 972-446-1040 to have a chat.
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Source: Startups