It’s sad when a business fails because of issues with its market or its execution, but it’s a tragedy to see a business fail because of too much success. And it happens much more often than people think too.
One study found that premature scaling was the number one cause of failure for startups with 70% of startups in the country failing for that very reason. This is why you need to be very careful when it comes to expanding and make sure that you know and are ready for the challenges that lay ahead. Here are some of the challenges your business may have to face as it gets bigger.
Managing a Larger Workforce
One of the most overlooked challenges of scaling a business is everything that comes with having more employees. We’re not just talking about managing them, but also all the additional back-office work that comes with it.
Managing a benefits plan, for instance, is much easier when you have a handful of employees. This is why you’ll need to find ways to streamline your benefits programs to make them easy to monitor.
You could go with a benefits provider that will allow employees to pay in-store using Vanilla Direct or cash, for instance. This alone will simplify things for everybody and make it much easier for you to track your benefits costs.
Another thing you might want to consider is working with a public employer of records. A PEO will take over all your employer responsibilities and liabilities and will also handle things like tax reporting, payroll, and everything else relating to HR. This will allow you to grow your business with more peace of mind and attract better talent as well.
Managing Data
Managing data will become a priority as you get bigger and will also become more complex. With the right policies, technologies, and practices in place, your company can significantly improve its ability to analyze and gather business intelligence. There are many software solutions and packages that will help you collect, compile, and understand your data in a user-friendly way, so start looking at them right away and learn how to use them to improve your results.
Managing Inventory
Your inventory will also become much larger and difficult to manage as you grow, so make sure that you have the right set of solutions in place. You’ll need to start implementing more digitization and looking into things like just-in-time inventory management.
Just-in-time systems allow you to get only the amount of product that you need when you need it by turning your inventory with your finances in real time. If inventory management is a concern for you, then now is the time to understand the core principles of that methodology and start looking at your options.
These are all things that you’ll have to be prepared for when trying to grow a business. Take the time to know what it’s truly like to run a large and complex operation, and don’t be too eager to accept a big contract if you’re not entirely sure that you’ll be able to fulfill it.
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