By Nate M. Vickery
Currently, there are around 28 million small businesses in the United States and according to statistics gathered by Forbes, nearly 22 million of them consist of a sole, self-employed entrepreneur, with no additional employees or payroll. Many businesses start out as a one-man show, actually, with the owner doing everything from marketing to accounting. And next comes the first employees and a more formal structure. However, after some time, many businesses find they are being held back, with their methods out of step with the company’s growth.
Companies that use outdated system are obviously less efficient; in fact, according to Intel, 36% of small businesses are losing one work week per year, due to old systems, but that’s not the main issue here. The problem is, way too many businesses are trying to do too much without the proper infrastructure, which puts their whole operation at risk of failing. And that is why business owners should be on the lookout for any signs that they are over-stretching themselves. While profits and sales may be on the up, if your business doesn’t keep up with the expansion, many problems can emerge.
Data Isn’t Up-To-Date
If your employees have trouble keeping paper files organized or they are fighting to input data into your systems, then you definitely have one of two possible problems – incompetent workers or inadequate business processes. Before you blame either one, you have to think about a few things. For starters, if you are using an entry-level software packages, your tools might create as many difficulties as they eliminate. The best thing for you to do would be to talk to your accountant (if you have one) about your business’s needs, for instance if you need to upgrade your tech, which system may be best for you.
Your Systems Aren’t Working Together
When it comes to startups, most people establish different lines to deal with wages, orders and expenses, but once you start growing, if you want to stay up-to-date. These parallel records aren’t sufficient. If you cannot produce coordinated figures across all aspects of your businesses, and see a “snapshot” of your performance, then you have a big problem on your hands. Thankfully, technology is there to help you – most accounting systems have dashboard tools that give you the latest data, in the easy-to-understand format. And a vast majority companies nowadays depends on modern accounting software to show them key performance indicators.
You Need an Actual Accountant
Most owners feel the need to handle every responsibility their business needs handled. Recent CIMA research indicates that while most owners who do the finances believe that this involvement gives them more insight into their business, the reality is much different. Seeing how most of them don’t have any actual accounting experience, they usually don’t understand the law, nor accounting, which often leads to poor decisions. Some regard accountants as mere “bean counters”, but the matter of fact is, they are often valuable business advisors. Also, a qualified accountant has the skill, and more importantly the time to analyze every single detail you might’ve not notice.
Employees Aren’t Communicating
If you want to continue growing and expanding, you will need something more than a system that tracks sales and profits. Running a successful organization requires good communication; what’s more, you need to ensure that every member of your staff is kept well-informed of what they need to do, and more importantly, when they need to do it. For instance, if you are dealing with a lot of telecommuters, what you need is a powerful schedule creator that automatically designs conflict-free schedules, imports old ones, copies shifts, etc. Moreover, ask yourself if you’re talking to all of your staff members every day, because if not, it might just mean that your company is finally big enough to justify a proper management structure.
Revising Your Business’s Operations
Lastly, if your organization cannot fulfill orders, or it cannot afford to take on a new client, it is unquestionably time to revise your complete business plan. In that situation, you need to take a hard, long look at how you operate and really figure out what’s getting in the way of your business growth. And even though this evaluation will take some time, you have to realize that is a vital investment in your company. Do you think a person like Allen Walton became a million-dollar, one-person business by neglecting negative aspects of his business?
Nate M. Vickery is a business consultant from Sydney, Australia. He has a degree in marketing and almost a decade of experience in company management through latest technology trends. Nate is Editor-in-Chief at Bizzmarkblog.com. You can reach him on Twitter at @NateMVickery.