Have you ever wondered why some businesses grow exponentially, and why some businesses fail to grow at all? Based on my experiencing working with businesses, I find that there are three general reasons that impede the growth of a business.
Reason #1: The mindset of a business owner.
There is a difference between an entrepreneurial mindset and an employee mindset. What prevents many businesses from growing is the business owner’s inability to switch from having an employee mindset to an entrepreneurial one.
What is the difference between the two mindsets? There are a lot, in fact.
While entrepreneurs work to develop their skills, employees work to improve upon their weaknesses.
While entrepreneurs thrive on risks, employees try their best to minimise or even avoid it altogether.
While entrepreneurs delegate tasks and other responsibilities, employees try to do as much as they could themselves.
It is common for many first-time business owners to develop and possess an employee mindset, especially when they’ve only recently switched careers from being an employee to starting their own venture. However, business owners need to shift their mindset if they want their business to grow. What can they do?
- Learn to get comfortable with the uncomfortable. Having a business means embracing uncertainty, and understanding that discomfort is part of the entrepreneurial life. On the bright side, the best and most rewarding ideas develop outside of one’s comfort zone.
- Enjoy breaking the rules. Some rules are meant to be broken (but this has nothing to do with doing anything illegal or breaking the law!). But the intent of breaking rules should be to find ways to improve—to challenge the status quo in order to innovate and provide better solutions to existing problems.
Reason #2: Lack of experience and expertise
The lack of business acumen can lead to several poor decisions: poor planning, procrastination and poor time management, “putting all eggs in one’s basket,” poor record keeping and financial controls, poor money and cash flow management, among many other things. This may even cause the demise of your business.
The solution, however, is not to try to improve on each and every aspect that you lack expertise in—remember, that is the employee mindset! The best thing to do is to acknowledge your strengths and weakness, and find help in the areas that you lack experience or expertise in.
Do not be afraid to ask for help! You can hire someone who will complement your skills, or you can find a business coach who can provide you with guidance on how to navigate your business. As a business coach myself, I help businesses by providing a sounding board for their ideas, by providing an objective point of view of the competence and deficiencies within the organization, and by providing recommendations on how to improve certain areas of the business.
Reason #3: Failing to reinvest back into the business
You cannot grow your business by doing the same thing over and over again. In order to grow, you must reinvest a part of your profit back into the business. There are several ways of doing that.
- You can grow your marketing and sales expenses.
- You can increase your assets, such as your machines, equipment, or even your shop or office.
- You can extend your inventory.
- You can hire new staff or outsource some areas of your operations to allow you to focus on what matters.
Another area that many business owners forget to do is to invest in themselves. Remember, an entrepreneurial mindset requires one to improve upon skills and expertise. By investing in yourself, your business’s greatest asset, you also invest in the future of your business. Your business’s growth requires that you grow, too, as a business owner.
If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.