Businesses don't fail only when they hit rock bottom or are not doing well. The opposite may equally be true. Many companies could also fall flat on their faces during the expansion process. Growth takes work in the business world. As a business grows, it goes through several big and small changes.
Over time, coping with this challenge has proven tricky for many companies. That's why many businesses crumble every year; they can't keep up with the financial face-ups associated with their growth.
Here is the list of 7 most anticipated financial challenges in the process of business growth:
1. Rising interest rates
There is a famous adage that goes, "It takes money to make money." The business c "m" unity strictly subscribes to these words. When a business is all set to take a big jump, it takes money to do that. And, more often than not, the most obvious way to get the required amount is to borrow it.There might be many business loan schemes, but they need more breathing space for the borrowers. Whichever loan scheme you may apply for, at the end of the day, you will be eligible for a decent interest rate. On top of that, interest rates are always on the rise, making borrowing even more insecure.
This problem may be more valid for small businesses. A study finds that over 20 percent of them cite the high interest rate as their top problem. To be on the safe side, you must map out how to pay your business loan before applying for it.
2. Hiring new staff
That's one of the most prominent That'sial challenges. You have closed a massive deal. Can you execute it with perfection without adequate manpower? We all know the answer is a big no. The current age is unarguably the most advanced one in terms of technology. Companies are depending on machines more than history has ever recorded. Still, machines can't entirely replace human options—at least, not in the distant future.The hiring process involves a lot of capital. Many businesses contact hiring companies to take over this task on their behalf. Others do it through the old pattern of advertisements. Either way, you are sure to spend significant bucks.
It is an intelligent businessman's hallmark tbusinessman'sme as valuable as money. Companies spend about 40 percent of their time in the hiring process. Identifying the profiles of suitable candidates, inviting them for interviews, and conducting interviews are time-consuming.
The above infographic shows in-depth hiring costs in 2019
3. Investment in technology
Usually, it is easy to stay in touch with the staff when you have a handful of employees and their geographical locations are limited. You can correspond with them by phone or by creating WhatsApp groups, and Facebook groups do the job. However, effective communication becomes a mounting task as soon as a corporation expands.Mind you, poor communication comes with a heavy cost. A survey of 400 companies, each with 100,000 employees, says that these companies lose 62.5 million dollars per year due to communication lapses.
Therefore, advanced technology becomes the need of the hour in the growth process, and it does not come cheap. As your business swells, you start looking for a quality workforce and begin to recruit employees from remote locations. Many talented millennials would rather work from home than come to the office.
Moreover, day-to-day money management is also more challenging without proper technology. Business owners can do it independently, but they need an automatic mechanism after that threshold is reached. With inadequate management tools, problems like the following become quite commonplace:
- Incorrect calculations
- Losing track of expenses
- Mixing personal and business purchases
- Dealing with invoices and receipts
4. Marketing
We are surrounded by so many cheap digital marketing methods. Perhaps they do a fine job until your business shows signs of expansion. Growth forces you to market your product to a large audience. For this purpose, it becomes mandatory for you to hire a marketing agency, freelancers, influencers, and so on. These people are most likely to maximize the range of your marketing message. But in order to take their service, you need to allocate a solid budget.5. Training new recruiters
As soon as you finish the recruitment, you can't immediately send the newly hired lot for the training follows the next. It is no longer one of those "good things" to do. Training has become a requirement"You only "know your new employees from the surface. They might be coming from a different company culture, which contrasts with yours. So, acquiring a new company culture and training them to use technology financially takes a lot of you.
The stats explicitly illustrate that time and money are spent training new staff.
6. Balancing quality along with the quantity
When you have fewer customers to manage, it is relatively easier to maintain the quality of your products. That's why it is not unusual for businesses to compromise on quality when the demand for their products increases. But in the long run, you can't sustain your place in the market unless your quality is also up to the mark.If you can't make it through your growth phase, you must consider eliminating outdated techniques and investing in new ones to keep the quality in check. A modern scientific approach is a must to ensure quality on a bigger scale, which requires reasonable resources.
