It is the dream of nearly every entrepreneur to see their firm grow from a small enterprise to a big organisation. Few people start a business with a view of keeping it small as a source of income or employment with no desire to expand it.
However, most entrepreneurs struggle in vain to expand their firms. There are several reasons why small businesses stagnate or fail to grow at an appreciable rate compared to their peers in the market.
Most people think lack of capital, poor economy and competition from major players are what suffocates small firms. This is far from the truth.
From my own experiences and interaction with many business owners over the years, I have noted key hindrances to business growth. Fortunately, they are all manageable and should not deter you from growing your firm if you know them.
First, be a good finance manager. Poor personal and business money management are some of the key causes of small business stagnation. This is especially among sole entrepreneurs and family businesses, where personal and business money is one and the same thing.
Secondly, do not try to do so many things at the same time. The result of doing a hundred and one things is lack of focus and commitment to any of them. Business requires a lot of attention and commitment to steer it through the startup phase to growth.
Thirdly, learn to delegate. Some of the small business owners want to be everywhere and do everything rather than delegate some duties to others. Since they are limited in time, energy and skills to do many important things, you find that most critical functions are not done well.
Fourthly, hire the right people. There is a tendency to hire friends, relatives or people with few demands to cut on costs. However, in the long run it is very expensive to run a business with incompetent people.
The people factor is very important in business success. You may have wonderful products and a ready market, but if you don’t have the right people doing the right things, it is in vain.
Fifth, invest in marketing and product development. The notion that if you build a better mousetrap the world will beat a path to your door is the greatest lie. Maybe it happened in the past but not in our days.
Sixth, do not be obsessed with making money; rather be obsessed with meeting customers’ needs and money will come in as a bonus.
If your mind is occupied with how much money has come in instead of how customers are being served, you need to shift your mindset.
As you can see all these factors have to do with leadership. This effectively means that the single greatest determiner of your business growth is your leadership skills.
You will never succeed in business unless you are a leader. As John C. Maxwell said, ‘Everything falls and rises on leadership.’
This article was first published in The Business Daily on November 12, 2019.