Growing a business can be an exciting journey full of milestones and achievements, but as with all things, growth requires change. Every growing business reaches a point where its original systems and processes no longer keep up or function properly with the business’s growing demand and operational problems arise.  To avoid such issues, you must be aware, be proactive, and have the ability to spot these types of operational problems early on before they become bigger. In this article, we’ll discuss four of the most common operational issues growing companies face that you need to watch out for.

Operational Problem #1: The Cash Flow Crunch

As a business expands the management of its cash flow becomes more and more complex. Without a clear understanding of your business’s financial needs and a budget in place that can sustain its growth, you can quickly find yourself in a sticky financial situation. Typically, as a company grows, so does its expenses. All expansion comes with added costs, such as those needed to scale operations, increase inventory, and expand your labor force. To prevent liquidity issues and ensure your company’s financial stability, you must plan ahead and carefully manage your cash flow. This will ensure you have the added funds available to sustain the company’s growth.

Operational Problem #2: The Employee Quagmire

One thing every growing business has in common is that if it wants to grow, at some point, it’s going to need to hire more people. The more your business scales, the more people it will need, which also means the more employees you have to monitor.

It’s very common for leadership to get distracted and overwhelmed when the business starts growing. These distractions can lead to a disconnect between leadership and employees, who often find themselves overburdened with the additional workloads or left hanging without adequate support.

As a leader, you need to have a plan in place to ensure additional employees are hired at the right times and your current staff isn’t left in the cold without support. In addition, when hiring new people there needs to be a process in place to ensure the new employees are properly onboarded and trained. Once again, if leadership is too wrapped up or distracted, expect your onboarding and training can become lax or fall by the wayside.

Neglecting these important items can lead to compromised work quality, employees who are the wrong fit for the job, work inconsistencies among employees, diluted company culture, and disgruntled employees. If you want to grow your company and keep your workforce happy you need to maintain close communication and provide them with adequate support at all times.

Operational Problem #3: Process Paralysis

In the business world, the speed at which your company is able to adapt, and change is seen as a strength and also something that can give you a competitive advantage. If you’re not adapting and changing, you run the risk of your systems and processes becoming inadequate, leading to inefficiencies, inconsistencies, and bottlenecks. All growth requires change. Relying on systems and processes that are old, outdated, or lack scalability can hinder your company’s ability to quickly resolve operational problems, respond to fluctuating market demands, and keep up with your competitors.

Operational Problem #4: Consistency Craters

Maintaining high-quality standards is important for all businesses. As we have already established, as your company starts to grow, it’s easy for everyone to get distracted by the company’s newfound success and increase in business. This distraction often causes people to lose track of quality and quality starts to take a back seat. The quality and consistency of your company’s products and services are what customers count on and are often one of the reasons for your company’s success in the first place.  Inconsistent quality erodes customer trust, turning customers away and damaging your company’s reputation. If you want your company to experience long-term success, you must ensure it maintains its high quality and standards of excellence.

As you can tell from the operational problems mentioned above, business growth is a delicate balance between expansion and operational integrity. Being aware of these common operational challenges can help you take proactive steps toward avoiding and mitigating these issues.  In business, it’s not about growing fast, it’s about growing right and ensuring your business can continue to sustain that growth and reach new heights well into the future.

Stay tuned; in our next article, we’ll explore the operational issues that lead to these bigger problems so you can look to avoid them.

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About Author
Brad Wedin

Brad Wedin brought over 25 years of management and operations expertise to NextRev Services. He founded the company with the strategic goal of helping Business Owners, CEOs, GMs, and Upper Management overcome their operational challenges and obstacles.

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