To a growing business, challenges and decision making are continuous. Decisions that will either make a business more profitable or risk losing clients. The impact of one decision, can have a flow on effect in your business. The ability to focus and hit the right trigger is essential. So what are the challenges and what type of decisions are necessary to make your business thrive?
The value of employee morale (People Challenges)
Morale is an intangible trait important to every functional working group. Depending on the mood of the group, it can either make them more energetic and excited about performing for the business or be drained with the turmoils of the workplace. The amount of energy consumed by the workplace environment shouldn’t be underestimated. Issues inside the group can produce conflict, discomfort and distrust that can interrupt with the rest of the company’s operating effectiveness and collectively, it affects the business’s ability to grow. Ensuring the team can communicate and work cohesively, and any issues are quickly resolved, is key to a highly productive workplace.
A strategy that people can relate with (Strategic Challenges)
If the revenue is not growing as fast as you would like, it may be time to re-assess your strategies. It might be that you’re not selling to the right people, that you were mistaken in the demographics of your target. It might be that your channel of distribution is not efficient.
Linking it back to the first challenge – people. Your strategy for increasing revenue should be concise and articulated in such a way that it is easy to understand for your people to fulfil. Create a strategy that is unique to your market, reinforces your vision and is something that your people can identify with. It will make it easier for them to link to the right customers and bring in more business.
Making it all work (Execution Challenges)
Now that you have your people on the same page, and that page has been articulated well and the strategy is sound, it’s now time to execute.
Execution is done best when it’s efficient. There’s no use in increasing revenue when the profit remains the same. As a business, you want to ensure any funds spent operationally improve the bottom line, but tardy execution can sometimes dwindle away the funds without making any headway towards your goal. Keep a tight rein on the budget, test your execution first, and ensure the results are there. This way you’ll be sure the funds are being spent to deliver the right outcome and it will also give you the opportunity to test your internal processes and make improvements where they are needed.
Improving Cashflow (Cash Challenges)
How long does it take before a sale is closed? Measure how much times is needed before a dollar spent comes back. This will give you a clear idea how money flows through your business. Improving cashflow is vital in any business. You don’t want to be running on an empty tank hoping that your car glides through to the next pit stop.
If the average time it takes for money to come back into the business is say 60 days, cutting this in half gives you a faster return and, the ability to invest that into something else. Having cash is necessary for any growth to occur. Check your invoices, read tips on how make sure invoices are paid on time. They’re your source of cash.
As a business, you have to understand which challenge is your priority and has the biggest impact on your business. Most companies have dedicated people, a sound strategy but struggle to translate that to a profitable venture. Others can execute, generate cash but have a revolving door for staff which impedes business growth. Balancing the two can have great effects on your business.
If you’d like to talk to someone about what may be hampering your business growth, contact your trusted advisor at PJT today.