The Most Common Challenges Faced by Growing Companies
Every businessperson wants to grow their business but there are many challenges involved. In fact, more than 55 per cent of leaders of scaling businesses have experienced a moment when they were afraid their business would fail.
According to new research from Barclaycard, which explores the pain points and milestones associated with scaling up a small business, ten (57 per cent) leaders of scale-ups – defined as “businesses with at least 10 employees and average annualized growth of 20 per cent or more in last three years” – have experienced a moment of uncertainty.
The Hurdles Ahead
Among the most common challenges faced by growing companies, the study mentions, are maintaining employee wellbeing and satisfaction, finding and retaining talent and standing out from the competition.
The most pressing concern is the wellbeing of the workers (referenced by 66 per cent), followed by talent search (64 per cent), standing out from the competition (63 per cent) and maintaining customer service standards (63 per cent), says the research, which was carried out by Opinium between 22 January and 14 February 2019. Five hundred interviews were conducted online with senior decision-makers in businesses that meet the OECD’s definition of a scale up.
The Support System
When it comes to tackling hurdles and building a business, over a quarter (27 per cent) turn to their bank for advice and support; 22 per cent call on IT providers and an equal number to local business networks. Overall, the vast majority of growing companies (91 per cent) have looked to external partners to help scale their business. There remains, however, a clear gap in support with seven in ten (71 per cent) scale up business leaders calling for more help to be available to successful start ups ready to grow, the study says.
Surprisingly, 25 per cent of respondents, all of whom meet the criteria for a scale up business, don’t know or haven’t heard of the term “scale up”, highlighting the need for greater discussion about the requirements of, and support available to, companies in this critical phase of the business lifecycle, it states.
The research shares top ten “milestone moments” so that business leaders know when they’re moving from start up to scale up. They are:
- Moving to bigger office or shop
- Experiencing a rapid increase in customers
- Launching a new website
- Developing a social media presence
- Investing in customer experience and not just products
- Starting to trade internationally
- Implementing a more reliable payments system as transaction volumes increase
- Working with a finance expert to look after the business accounts
- Hiring an HR consultant to recruit and retain the best talent
- Refreshing the look and feel of their brand, for example introducing a new logo
While scale ups view themselves as best-placed to innovate, doing so requires funding, says the study. More than three-quarters (77 per cent) agree that a scale up business needs to “invest to grow”, with, on average, 29 per cent identified as the proportion of turnover that needs to be invested annually to secure progress.
Bianca Miller-Cole, entrepreneur and author, says, “Getting the support you need in the early stages is vital for making your business a success, even if it’s just recognizing the moment when you’re no longer a startup.
“My advice to any scaling business is not to be afraid to ask questions and always approach growth as a chance to innovate. This does not just refer to your product; your website, social media presence, events, and store layout are all areas where you can test out new approaches. Ultimately, from my experience, scaling is growth for the greater good – but inevitably there will be challenges along the way.”