Growing Pains of Small Business: The Biggest Barriers to Business Growth

It is always the dream of every business owner to achieve success in his or her business venture. The entrepreneurial spirit of someday owning a big and growing business can never be extinguished unless if you are one of the many small businesses that end up in business failures every year. The market is tough these days with the barriers of business growth seem to constrict every chances of success. Entrepreneurs work hard to make their business grow but achieving success can be quite difficult, as the Australian Bureau of Statistics would suggest. The agency noted that only 4% of all businesses in the country are employing more than 20 personnel and 80% with 5 employees or less. If you want to jumpstart your business ambitions, you have to start from the beginning by searching franchise opportunities and business for sale on the Internet.

There is a prevailing urban myth for small business owners in Australia wherein bigger businesses have more problems than small startups. The truth of the matter is that the size of the business is not the issue because not all business owners undergo the same challenges and rigours of business management. The strains and pressures of managing a growing business is the real reason why the top 10 business failures in the country happen.

Developed in 1972 by noted Harvard Business School professor Larry Greiner, the business model explains the barriers that eventually cause financial strain and organisational inefficiency in any small business. Here are the five biggest roadblocks to business growth and success:

Creative Stage
During the early stages of a business startup, there is a constant need for owners to participate in every aspect of business management and operations. During the creative stage, problems will occur when the reliance and dependence on the owner’s role and participation becomes unsustainable. In this case, a leadership crisis will eventually undermine the entire process of business growth. It is necessary for someone to take charge of the situation and delegate specific responsibilities to the employees so that the owner can do other things that would help business growth.

Directive Stage
Oftentimes, business strategy failures are caused by bad judgment, lack of business sense, and ineffective leadership style. In the directive stage, the business owner takes charge and responsibility for all the business decisions. Unfortunately, a growing company would mean that decision-making responsibilities would be even greater.

Delegation Stage
In order to relieve the pressures and challenges of managing a growing business, owners tend to delegate specific responsibilities and roles. Most small business failures happen when the owner and management fail to control all aspects of business operations. Lack of coordination and teamwork are some of the factors that may weaken the business structure. If the efforts were uncoordinated then the business would fail.

As businesses grow and evolve, the management becomes more bureaucratic. Business practices become more complicated and unwieldy thereby preventing small businesses from reaching their full potential. In fact, statistics of small business failures are quite significant considering the fact that bureaucratic red tape constricts business activities and market expansion. In this way, it is important to restructure such an organisation into something more collaborative.

Crisis Points
Greiner contended that it is inevitable for small businesses to achieve the potential to grow and become successful. Once hitting some serious roadblocks along the way, some businesses even regress and fall back to where it started. Business failures in Australia are bound to happen when owners are not prepared to overcome serious business barriers they encounter.

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