Moving up the company lifecycle ladder is not an easy feat, but there’s a huge payoff on the other side. When your small business moves up a notch and enters the growth phase, there’s a myriad of growth opportunities that you can benefit from. By this time, a lot of people are aware of your brand, and the customer base is usually well-established. Companies can take advantage of the situation by identifying institutional gaps in the market and see how they can be filled. Businesses can also target new market segments, expand their production facilities, and improve the quality of their finished products. Unfortunately, all of this is easier said than done. The growth phase is full of both profits and challenges. It’s all about how well companies take on these challenges and tackle them.
Let’s take a look at some of the challenges that small businesses encounter in their growth phase:
Responding to Competition
We live in a time when customers have far too many alternatives. Both physical marketplaces and the internet are bombarded with thousands of sellers who are offering similar products and services. Even if you enter the market with a new idea, it won’t take long before someone copies it. When you enter the growth phase, you become not only popular among customers but also among potential competitors. This is when similar sellers become aware of your presence and start taking steps to snatch your market share. As a small business owner, always be prepared for the threat of new entrants. You’ll only lose out against the competition if you’re not prepared. Define your unique selling proposition very clearly, and make sure you convey it to the customer well.
Never get into a price war. In the race to settle a lower price than the competitor, small businesses often end up hurting their own revenue. Focus on the quality of your service instead. There’s so much that you can do! Make your product more accessible. Go online. Improve your packaging.
Keeping Up With Market Changes
Remember the time when reel cameras were in, and we could only take a limited number of photos with one reel? Ever wondered what happened to companies like Kodak and who they lost out to? The answer is simple. As the market moved forward, the company refused to innovate. They didn’t realize that digitization would soon take over and digital cameras would replace reels. This is what happens when your business vision is myopic, and you don’t stay abreast of changes. Market changes are not confined to technology only. Markets should be prepared for all kinds of changes, including those in lifestyle, spending patterns, and preferences.
The best way to stay ahead of these changes is never to let go of market research. Even if your business is minting profits, never stop surveying. If you don’t have the resources to pay a research agency, do it on your own. All you have to do is to choose a relevant sample and conduct focused group discussions. Try and gain an insight into what your audience likes and what they don’t like. Better yet, visit supermarkets and observe buying behaviors if you can.
Dealing With Accounting Data
When your profitability ratios go up, so do numerical figures—which is both a good and bad thing. It’s a good thing because you’re making profits. It’s a bad thing because there are more accounting data to deal with. More customers mean more invoices, more accounting processes, and more complicated financial statements. You might also feel the need to hire more accountants for this matter.
The good news is that most of the hassle can be just avoided by getting accounting software like QuickBooks. QuickBooks is an ideal accounting solution for small businesses that are in the introduction or growth phase. The software allows you to track your expenses, record transactions, and generate important financial reports within a few minutes. As an added bonus, you can even upgrade to a more advanced version and get industry-specific software for your business.
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