“Only the paranoid survive.” Andy Grove, former CEO of Intel
Every entrepreneur is out in the market to grow his / her business. Once you wear a hat of an entrepreneur, your vocabulary has some fixed words like capital, payment, customers, deal, business, growth, loan, market, marketing, and sales. Check what you speak every day and on every occasion. You become a 24 X 7 entrepreneur.
Here in this post, I present 8 hinderances you need to work upon to grow your business.
This can suffocate the business. Adequate working capital is like oil which runs the business smoothly. No entrepreneur can have enough capital. The good news is banks can offer working capital loans and even collateral-free loans up to Rs. 20 mn.
There are loans available for investment in fixed assets like plant, machinery, and other fixed assets. The key is to have an adequate debt to equity ratio while you borrow. Over borrowing kills business with excess interest cost and under capitalisation suffocate the business.
Assess the need for the right capital and invest. This is very crucial. Without adequate capital energy of the entrepreneur will be drained in managing the money daily.
The financial literacy of the entrepreneur is vital for business growth and success.
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Lack of Good People
“Acquiring the right talent is the most important key to growth. Hiring was – and still is – the most important thing we do.” – Marc Benioff, Founder, Chairman and co-CEO of Salesforce
There is a war for good talent in the market. Visionary companies are aware of it, others are focusing on saving money by recruiting mediocre talent. It is the people who drive business. Why large companies are paying huge packages to new graduates from the B Schools? They know the value the new graduates can bring to the company.
Retaining talented people is another challenge. Retain your talented people, they are the most valuable assets. They have the power to make your financial balance sheet stronger.
Usually, small businesses, one-man proprietor driven and family businesses do not realise the value of the right talent.
“Human Resources isn’t a thing we do. It’s the thing that runs our business.” Steve Wynn, CEO of Wynn Resorts Limited
“Nothing we do is more important than hiring and developing people. At the end of the day, you bet on people, not on strategies.” Lawrence Bossidy, Former COO of General Electric
Difficulty in Dealing with the Business
Ease of doing business is critical for the growth of any business. Make it easy. From knowing about your products, how it works, how it solves customers’ problems, sells process, payment, return, customer support after-sales. Ease at every level is critical.
Effortless experience is the driver of business.
“You need to give your customers fewer reasons to be disloyal, and the best way to make that happen is to reduce customer effort.” Matthew Dixon, The Effortless Experience: Conquering the New Battleground for Customer Loyalty
Yes, to reduce disloyalty, increase loyalty focus on ease of doing business. Do you have a matrix measuring ease of doing business with your enterprise? If the answer is no, introduce it today.
You must know your customer effort score.
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Legendary Peter Drucker had said, “Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
Good marketing is the key. It is the bestselling product people talk about not the best-produced product. We are living in times when marketing is key but no one likes to be sold. Therefore, marketing has to be natural and humane.
The days of marketing what used to be over. Now the marketing is about talk of the town customer experience, helpful content-driven marketing, sharing customer reviews, free to use, etc.
Smart marketing is the key skill to sell anything. (The definition of smartness has changed from smart messaging to smart messaging coupled with superior experience). Lack of such skill and strategy hampers business growth.
“Content marketing is the only marketing left.” Seth Godin
“What helps people, helps business.” Leo Burnett
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Lack of Trust
Trust is the foundation of every business. It is the duty of every entrepreneur to work on establishing trust among the ecosystem customers, supporters’ employees and investors including banks.
Governance is crucial for the growth and survival of any business. Any business that takes trust and better governance for granted and ignores suffers.
Build trust, people will support. Customers will support and investors will support. Why Tata brand is known today? Trust. Why Amazon is successful? Trust. Customers know if they are not satisfied, goods can be returned and money will be deposited back into their account without fail. Their return policy and return operations are the winning drivers.
“In the age of transparency, honesty, and generosity, even in the form of an apology, generate goodwill.” Alexander Asseily, founder of Jawbone
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This is why many entrepreneurs do not invest in research and development, innovation, good people, retaining talent, the right technology, cut corners. They believe in the short term and immediate benefits.
Dhirubhai Ambani had a vision. He started to invest in textile and could think of backward integration up to the Crude oil and petroleum. Mukesh Ambani had a vision. He could invest in 4G, though late entrant in the telecom space but is now leading the space. This is what visionary entrepreneurs do.
It takes investment, patience, long-term vision, the right investors and a team of people. When an entrepreneur ignores all these aspects, the business hardly survives one generation.
“Chase the vision, not the money; the money will end up following you.” Tony Hsieh, Zappos CEO
Poor Customer Experience
“Be nicer to your customers than your competitors.” -Richard Reed, Co-Founder of Innocent Drinks
In times of social media, talkable customer experience has become paramount. You can’t create poor customer and walk away. You have to pay the price. The whole world is likely to know about it if and when your customer shares his experience online.
Don’t you check customer reviews of hotels and products before you buy them? Customers of every industry are sharing their experiences whether online or through word of mouth. This has become so much important that you can actually get the benefit of good customer experience and word of mouth publicity it generates.
When you focus on creating superior customer experience your advertising and marketing cost actually can come down. The reverse is also true. Not so good customer experience makes it difficult for your sales team to sell your product/service.
“Your most unhappy customers are your greatest source of learning.” Bill Gates, Founder, and CEO of Microsoft
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Yes, many times entrepreneur himself become a hindrance to business growth. His whimsical style of working, control mindset, I know everything attitude, I do everything mindset, inability to tolerate talented people, inability to tolerate divergent views, and several such limitations of the entrepreneur limit the growth and affect the business.
Remember you might be successful in the past, your ways worked in those times, but if you can’t change, past ways will not guarantee you success in the future. The future is not an extrapolation of the past. Self-renewal is vital.
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“It’s necessary to find a mentor who can invest time to know your personal capabilities and business model.” Nigel Davies, Founder of Claromentis
You will not listen to anyone but your mentor. This could be the best investment in the interest of your business and to protect the value you have created.
In the interest of your business, work on these hindrances starting with you.