Guest Post | Four Business Growing Pains That Shouldn’t Stop You From Succeeding
Lauren Delk of Upsourced Accounting knows the challenges entrepreneurs face. In 2013, she started her own social enterprise to raise awareness for anti-trafficking. Her experience provided her with insight into the struggles and hardships a business can face when first getting started. Now, Lauren works with Upsourced Accounting, where she helps businesses find success daily. We asked Lauren to share some of her best advice with us. We hope you find it helpful and informative!
When an entrepreneur dreams of growing their business, they don’t always consider how hard it can be. Running a profitable small business takes more than just a great idea; it requires passion and a ton of hard work. Growth is necessary in the capitalistic world we live in, and growth is great! However, it can sometimes bring on growing pains. Don’t let these four growing pains stop you from creating the company of your dreams.
Finding new sales is one of the toughest challenges every small business faces. If you’re new in a market, you have to dedicate large chunks of time to “putting yourself out there” and marketing your company to your target customer. It can be tempting to make sacrifices on pricing in order to land more customers. The more customers you try to service, the more confident you need to be that you’re being compensated fairly for the value you’re delivering.
For service-based companies, it’s critical to make sure that you’re not over-servicing clients as you begin to grow. As a small company, you can be attentive and personal with your first few customers. But growth means an increase in customers and you have to make sure you maintain a healthy profit margin as you begin to grow more quickly. A few tools we like to use to keep tabs on this are employee utilization reports (how busy is everyone vs. how busy they should be) and job profitability reports. To have a good grasp on what types of projects you’re pricing out correctly and which ones need more attention, it’s important to have a good idea of your margins and profitability at the individual job level.
Growth simply cannot happen without innovation. But innovation is disruptive and can cause a sense of unease if you’re used to doing things the way they’ve always been done. In the accounting world, we are not the norm. Our innovative spin on the traditional accounting firm differentiates us and allows us to grow. A common phrase we hold close to our hearts is “fail fast, fail forward.” This means we learn as we go, innovate where we can, and always move forward.
Learning from our mistakes (there are bound to be many with any small business) has brought us to new ways of leveraging technology and finding creative solutions to the challenges that we face. We’ve learned to take bold steps towards finding solutions and fixes for the long term, not those of the Band-Aid, temporary variety.
TOO MUCH OF A GOOD THING
You never expect it when “good problems” become bad problems. But too much of a good thing can wind up being detrimental to your growing company. (Just like your mom told you when you tried to eat too many cookies as a kid. Nobody liked those stomachaches.)
Gaining too many customers too quickly can have negative effects on your company. Customers can destroy a business if you haven’t taken the time to lay a solid infrastructure within your business model and operations to handle the services, costs, and management of the new workload. We are always seeking out new clients, but that means we are always looking for ways to reallocate workloads and streamline our processes while still being attentive and responsive to each individual.
What if the bank wants to lend you more money than you thought you could get? Just because the credit limit on what you’re allowed to use is higher than the amount you need to get started does not mean you should borrow everything you can. Investing in your company is vital, but not if it means you’re borrowing more than you can pay back. We work with our clients when they’re making these kinds of critical business decisions to know how much you can and should borrow based on budgets and projections we create.
GO TEAM, GO!
Growing businesses must take into consideration who they’re bringing onto their team. If you’re seeking investor dollars, VC’s and investors would rather give money to an A-Team with a B-idea rather than vice versa. Even the new graduate you’re hiring to manage your social media needs to match up with your standards and culture. At our firm we try to maintain a laid back environment with a “work harder, not smarter” attitude. Every employee becomes the face of the small business they work for in the growing stages, so we make sure they align with our culture, values, and vision.
If you plan to grow, you need to think about hiring someone to fill new roles that growth creates. By creating and pouring over budgets and projections, you can estimate what kind of salary you can offer a new hire, when you can afford to bring them onto your team, and if you are even in the fiscal position to do so. As an accounting firm, it was a turning point to hire our first non-accountant to handle aspects of the business that were keeping the accountants from doing actual accounting work. Whether you’re making a hire to try to get over that next hump and grow or to keep up with your increasing workload, it’s important to make sure that new employees fit the company’s culture.
Lauren works for Upsourced Accounting. Upsourced Accounting is a virtual accounting firm that offers accounting services to startups and small businesses across the country. For more information, visit www.upsourcedaccounting.com to learn how to upsource your finances so you can focus on growing your business.
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