by TEDCO Chief Executive, James Craft
Anyone who runs a business knows that it’s not enough to stay stagnant. You need to grow. In their 2015 research paper Explorative Versus Exploitative Business Model Change: The Cognitive Antecedents of Firm-Level Responses to Disruptive Innovation, Osiyevskyy & Dewald argue that any business that isn’t continuously innovating, adapting and disrupting new markets is standing still.
However, innovation doesn’t come easy. One study by Omri, Frikha & Bouraoui concludes that any business that lacks human, social or financial capital could struggle to undertake ambitious strategies successfully.
So what does it take to grow a business successfully? And what challenges do new businesses face? Planning is key, of course. But at a time when many industries and sectors are experiencing upheaval and marketplaces are more volatile than ever, plotting a reliable course to business success is easier said than done.
Nevertheless, there are several vital factors involved in moving your business with the times and it is these that I’d like to cover in this article today.
Finance
Businesses face all sorts of financial challenges during the pre-start and early start phases. From securing initial investment to managing cashflow, knowing when to buy stock or when to invest in new staff or resources, financial considerations are never far from mind for entrepreneurs. Not-for-profit organisations, in particular, face a range of challenges that can impact both operations and performance, as limited resources can make it harder to retain talent or measure impact.
It’s important for new businesses to explore any and all funding opportunities available to them, as a first step to addressing and overcoming financial challenges. Receiving early support makes it easier for businesses to carry out their missions and meet stakeholder needs.
Data and Systems
One issue can lead into another, and a lack of financial resources can cause small businesses to rely on poor or outdated data, systems and IT infrastructure. This can lead to inaccurate or misleading business data, as well as increasing the risk of a cybersecurity issue that can result in a loss of credibility, trust and funds.
Using poor quality or unreliable data can damage a business’s reputation, as stakeholders could suggest that the business is not serious about reporting accurate data. Implementing new systems and processes to validate data is a worthwhile investment for long-term success and resilience.
Risk and Compliance
Without secure systems in place, businesses find themselves at greater threat of cybercrime. Security issues can impact everything from operational productivity and financial performance to reputation with clients, customers and supply chains. In 2010, Eccles & Krzus highlighted the negative media coverage and poor public perception of an organisation’s actions surrounding cybersecurity as one of the key pitfalls of a cybersecurity incident.
Managing business risks is an important part of running any organisation, ensuring that goals are met and the needs of stakeholders and clients are served. Having a crisis management plan in place can help with rapid and effective responses to events such as the cost of living crisis or the COVID-19 pandemic.
People and Culture
A strong culture and moral compass helps to define a business for itself and its customer based. Shared values, beliefs, behaviours and practices within an organisation can be a powerful influence on the way employees work, interact with one another and with clients, especially in a smaller team.
A positive, high performing culture can bring several internal and external benefits to the table, including improved employee engagement and retention, enhanced customer satisfaction, increased productivity and collaboration, and greater innovation and creativity.
In order to create a positive culture, business leaders must clearly communicate their values and expectations, proactively modelling behaviours that align with company values. Providing ongoing opportunities and support for employees to be heard can help team members feel valued.
Final Thoughts
A business is only as strong as its foundations, so new and smaller organisations must take the time to invest in their groundwork (for want of a better metaphor) in order to build a culture of long term success. The individual factors involved in growing a company feed into each other, and they should be viewed as smaller parts of a larger whole. By doing so, business owners can create a more holistic picture of what is needed in order to help their organisation reach new heights.
By taking a critical eye to their finances, data, risk management and culture, businesses can set themselves up for long term success in their chosen industry.
If you’d like help getting your business idea off the ground, speak to our team of experts today by calling 0191 516 6102 or by dropping us an email at hello@tedco.org.