The journey of small and medium-sized businesses toward growth is marked by a series of strategic decisions in response to the variety of challenges they encounter. It requires striking a delicate balance between nurturing the core product or service, spreading resources across critical departments, capitalizing on intangible ROI opportunities, and forming strategic partnerships. And achieving this balance requires astuteness, focus, and long-term vision.
Effectively navigating the growth challenges positions a business well to overcome its current challenges as well as future obstacles. By anticipating and preparing for the growth challenges, businesses can pave the way for sustainable expansion in the ever-changing business landscape.
In this blog post, we look at the most common challenges to business growth and how to tackle them effectively.
1. Limited Financial Resources
Among the myriad challenges that most businesses encounter, a lack of sufficient financial resources is the most critical. Its significance stems from the fact that strategic business choices are often dictated by the resources the business has at its disposal. Every business function will compete for a larger share of resources but it is virtually impossible for every function to receive an equal share.
Ideally, a substantial portion of resources must be directed toward the development and enhancement of the core product or service offered by the business. This strategic focus on development is necessary for the product/service to remain competitive and compelling.
In reality, however, businesses have to allocate resources across all their functions including HR, marketing, sales, and IT. Although these functions do not contribute directly to product/service development, they play a vital role in enabling the development and, more importantly, in driving customer acquisition, brand recognition, and operational efficiency.
Balancing resource allocations becomes an intricate dance, where every department demands its share, so the resources are often spread thin across the entire business. In such a scenario, a prudent approach is to maximize the utility of investments. One of the ways businesses can achieve this is by outsourcing their peripheral functions. IT is one such function that requires a lot of resources in the form of hiring, training and certifications, and the work can quickly become overwhelming in times of growth. A good IT services company will help your business by reducing downtime using proactive rather than reactive IT support, managing technical debt, and improving operational efficiency.
If it is outside your core activities, outsourcing IT is a great way to save on precious financial resources. But, often outsourcing is easier said than done. Typically, resource allocation decisions, however small they may be, are dictated by return on investment (ROI). And, the ROI on investments in IT is usually difficult to put a monetary value on due to its intangible nature.
So, you need to make a business case for outsourcing your IT needs to a managed services organization. This will require you to quantify the cost of IT for your business and utilize non-traditional metrics such as time savings, improved reporting and decision-making, increased level of service, timely regulatory compliance, and increased efficiency through the quality of life tools to convince the stakeholders.
In conclusion, by outsourcing their IT functions businesses can concentrate their limited resources on enhancing their core competencies. Additionally, the flexibility inherent in outsourcing enables businesses to scale their IT operations in alignment with their growth trajectory, ensuring that technology becomes an enabler rather than a bottleneck.
2. Fierce Competition
For any business, competition is unavoidable. Whether in the form of direct rivals offering similar products or services, or more subtle indirect competitors vying for the customer's attention or spending, competition is ever-present. While the ability to outshine competitors usually depends on the distinctive features of a product or service, businesses also have the opportunity to harness marginal gains in other facets of their operations to give themselves a distinct competitive advantage.
No matter the size of a business or the resources available to it, technology has always been a great leveler. Digital transformation can help emerging businesses compete effectively with larger, well-established enterprises. For example, by leveraging cloud computing businesses can scale their IT infrastructure quickly, affordably, and easily. Additionally, the cloud also helps minimize physical storage, space, power, and associated costs, and offers unmatched speed of deployment, allowing businesses to stay lean and nimble.
It is well-known and accepted that technology permeates all aspects of business. In fact, IT is the backbone of all business activities. Therefore, effective IT management helps streamline internal processes leading to faster delivery times, improved quality, and higher customer satisfaction. One of the primary goals of IT management is to align IT with business goals and objectives. Such alignment can have ripple effects on other aspects of the business resulting in improved inventory management, lean business processes, and reduced time to market.
In conclusion, while product or service differentiation is pivotal for overcoming competition, businesses should also recognize the value of optimizing their internal processes, especially in the context of technology. Although individually small, the advantages can stack up to give the business a competitive edge.
3. Finding The Right People To Hire
The hiring market can be a difficult place for small and emerging companies. It is difficult for them to compete with the brand allure and perks offered by large companies. So they have to come up with innovative ways to overcome the challenges of finding the right people.
One of the ways businesses can compete in the hiring market is by offering remote work opportunities where possible and, more importantly, by leveraging global employee mobility. Thanks to the digitization of work and migration of corporate workloads to the cloud, businesses are no longer restricted by geographical boundaries. They can leverage this fact to hire employees to work from anywhere in the world.
As an added benefit, when employees work remotely, organizations can benefit from lower rent and utilities. Additionally, if the organization hires in countries with a lower cost of living, they will be able to offer attractive salaries and benefits while still saving on the overall wages.
This access to the global workforce opens up great opportunities for small and emerging businesses. However, these opportunities come along with their fair share of risks and challenges. First, the IT asset management practices need to be adapted to suit the requirements of remote work environments. Additionally, the IT infrastructure, processes, and systems also need to be bolstered to address the challenges in providing IT support to remote workers.
In conclusion, remote teams and global hiring when supported by efficient asset deployment and IT support services can help businesses overcome hiring challenges. Global employee mobility enables organizations to find the best talent on a global scale, giving them access to a talent pool that would otherwise be out of reach.
4. Cybersecurity
When a business is just starting, cybersecurity doesn’t get all that much attention. In their early stages, businesses typically put rudimentary security controls like antivirus in place and then forget it. Security gets attention only when there is a major security incident or a breach.
In other cases, once the company starts to grow, cybersecurity will start to get more attention. But by that time the systems and processes will be rife with vulnerabilities and risks. Fixing such ingrained risks and vulnerabilities is an uphill task and might even require a complete overhaul of the security controls and systems.
Businesses have to understand that IT security is not a one-time project. And no matter how many IT security controls you may have implemented, you cannot afford to be lulled into a false sense of security. The threat landscape is constantly evolving and cyber-criminals are devising new ways to exploit vulnerabilities and breach your security.
Keeping your IT infrastructure safe and secure is an ongoing process. To keep your security controls and processes relevant, you need to periodically revisit and update them. Also, you need to check your IT security policies, tools, and procedures to ensure that they are still relevant and effective against newer threats and business risks.
In conclusion, to be effective IT security requires concerted and consistent efforts, and the earlier in your business journey you start focusing on security the better. If you start early enough and keep a constant focus on security, it helps develop a security-conscious culture, which itself serves an efficient and sustainable security control.
5. Compliance Responsibilities
Meeting compliance requirements for System and Organizational Control 2 (SOC2), Health Insurance Portability and Accountability Act (HIPAA), Payment Card Industry Data Security Standard (PCI DSS), etc. is a huge project that requires a lot of time and resources. Also, compliance audits and certifications are usually an expensive affair. So, it isn’t something you want to engage in early on in your business journey.
Depending on the size of your business and your industry, compliance may not kick in until you reach a certain threshold. But once your business reaches the threshold, you will need to move quickly. So it's better to make preparations in small increments.
Thankfully, compliance requirements typically have a significant overlap with IT and data security. So, if you have been security-conscious from the very beginning, it is very likely that your business will have most of the security controls and processes necessary to achieve compliance including.
In conclusion, to prepare for most compliances, you don’t have to do anything additional, just implement the industry's best practices and standard security controls with an eye on achieving compliance in the long term. In this way, when the time for compliance comes, instead of starting from scratch, you just need to make a few adjustments to your existing security controls and processes.
Conclusion
You may have noticed the consistent theme in the challenges listed above. The current business environment is driven by technology. It is no longer sufficient to view technology simply as a tool that facilitates the achievement of your business goals. No matter the ultimate product or service, organizations need to build their business with technology at its heart.
Embracing this new role of technology will allow businesses to efficiently navigate growth challenges, drive changes in response to external factors, and re-imagine their business to keep pace with the changing markets.
Are your IT systems and infrastructure prepared for growth? Is your business prepared to keep up with the breakneck speed at which technology is changing? Reach out to us by clicking the button below to learn how we can help keep your business at the cutting edge of technology and ready for rapid growth.
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About The Author
Hari SubediMarketing Manager at Jones IT
Hari is an online marketing professional with a focus on content marketing. He writes on topics related to IT, Security, and Small Business. He is also the founder and managing director of Girivar Kft., a business services company located in Budapest, Hungary.