You started a business, and it’s successful. Congratulations! Entrepreneurship is no easy feat. Once business is booming, leaving everything exactly as it is can be tempting. But eventually, you’ll have to make some necessary changes to ensure your business continues to bring in a profit. Here are some common signs you’ve outgrown your current business model and suggestions on how to fix it.
You’re Wearing Too Many Hats
Many entrepreneurs bite off more than they can chew in the beginning stages of a startup. To keep staffing expenses low, you may be doing most, or even all, of the work yourself. As your business grows, meeting customer demands will be more challenging.
“There comes a time in every entrepreneur’s journey when you’ll need to bring in specialized help to take your business to the next level,” says Matt Masiello, Chief Marketing Officer of BabyBuddha, “It’s tempting to save money and push through doing most tasks yourself; but, in the end, you’ll only burn yourself out faster, which can hurt both you and your company in the long run.”
Build up your business with experts in their field. You may struggle to find time to expand your reach on social media, build out your company website, or track your company’s financial goals. Bringing on a marketing manager or accountant will give you the freedom to delegate these essential tasks and make space for you to do the work that lights you up.
Simple Tasks Are Costing You and Employees Too Much Time
In the business world, time is money. Your current staff and systems may not be capable of handling your increased workflow. Even with a full team, you may be wasting valuable time on tedious tasks like data entry and payroll.
“You want to be able to run your business; if you’re stuck processing numbers all day, your business is running you. Implement automated accounting and data entry systems to save you time and money,” advises Ann McFerran, CEO of Glamnetic, “and choose knowledgable staff who can get their work done without needing your input every step.”
Letting go, delegating, and giving employees more control can be scary. Look for employees who are go-getters and have the willingness to take on a leadership role in your company. Allow them to suggest automated systems and procedures that could improve workflow. Remember that releasing these tasks will result in much more efficient use of your time.
Customers Want More Than You Can Give
Are you consistently turning down clients because you have so much demand for your product or service? If so, it’s certainly time to make some changes to your current business model. You can only do much, and when what you can give isn’t satisfying the demand, it’s time to change things up in order to meet it.
“If your business is doing well, you may find that you’re turning potential customers down.” remarks Marcus Hutsen, Business Development Manager of Patriot Coolers, “Saying no to a customer is essentially saying no to money. Once this starts happening consistently, look at what you can change to be able to service more clients. Get creative and think about tiny changes that could increase productivity and allow you to say yes.”
Customers wanting more from you may seem challenging, but it’s good. They like what you offer and have come back for more. Growing to meet customer demand will look different for every business depending on the customer’s needs and what you offer. The solution could be as simple as bringing on a few more sales reps or rebranding to meet customer needs betters.
Your Industry Is Growing
If you’ve noticed an uptick in your industry, it may be wise to scale your business to grow alongside it. In 2020, Fundera forecasted that tech, health, hospitality, and consumer retail would become the most lucrative industries of the decade.
“If there is a boom in your industry, chances are you’ll have to scale your business model to match,” states Ubaldo Perez, CEO of Hush Anesthetics, “You want to avoid falling behind the competition. Follow current trends in your industry and be prepared to scale up or down accordingly.”
Keep your finger on the pulse of your current industry. For example, if you worked in PPE in 2020 and paid attention to the increased demand for your products, you could have scaled up production and met client demand, making your business a lot of money.
Cash Flow is Steadily Increasing
How are sales? Are you consistently meeting or exceeding projected earnings monthly? If yes, it may be time for your business to grow. You may need to change your marketing or sales tactics to create a steady profit if the answer is no.
“When you have a great month, scaling up your business model immediately can be tempting. You want to produce more, hire more staff, and make more money. However, you should probably wait until you see a consistent increase in cash flow before making any drastic changes. It pays to be patient,” advises Mary Kay Bitton, Head of Product Innovation at FLO Vitamins, “Once you see those consistent numbers, make a few key changes to increase productivity, and watch your profits soar.”
Work closely with your financial team to keep track of the numbers and know when it’s time to scale up production or services to increase your profit margins.
Miscommunication Between Departments
Communication is critical for any business to run smoothly. The larger your team gets, the more likely departments may fail to communicate with each other, which can cause delivery delays.
“If your team is struggling to communicate across departments, it may be time to reevaluate your business model,” recommends Lyudmyla Dobrynina, Head of Marketing North America at Optimeal, “Regular team meetings are imperative, especially if your team works remotely.”
Rather than adjusting the amount of staff, look at how the departments within your company communicate. Implement communication tools, like Slack, to ensure everyone stays on the same page.
Your Team Keeps Recycling the Same Ideas
Once you’ve been in business for a while, you may find that you and your team keep repeatedly coming back to the same ideas. If you keep implementing the same strategies, you could prevent your business from reaching the next level.
“You have to be innovative when running a business,” says Asker A Ahmed, Director of iProcess Global Research, “The marketing strategies that worked when you first started won’t serve you forever. Be willing to try new things and take a risk.”
Keep yourself and your staff educated on market trends. Be curious about finding new ways to reach new customers and expand into more diverse demographics. Keep your tried and true tactics in practice, but find ways to build upon them and turn them into something new.
You’re Relying on Competitors’ Marketing Strategies
At the beginning of any startup, you look to your competitors to build your marketing strategy. What they are doing works, and you know you’ll reach potential customers by implementing a similar approach. However, eventually, you’ll want to streamline your marketing for your unique brand and voice.
“Get in touch with what makes your brand different from the competition,” explains Erin Banta, Co-Founder and CEO of Pepper Home, “Why would a potential customer choose your product or service over what others are offering? Hone in on what makes you unique and highlight that in your marketing campaigns.”
Look at your brand from the perspective of the customer. Use surveys or client interviews to determine who your client is and what they desire from your product. Take those results and directly apply them to your next campaign.
The Customer Demographic Has Expanded
Initially, you set the goal to reach a specific customer—for example, middle-class women aged 25-35 living in a suburban area. Eventually, you’ll want to acquire a broader audience.
“A growing business means a growing client base,” says Nabiha Akhtar, CEO and Founder of Lil Deenies, “Growth requires you to reach a more diverse customer base. Ensure you have a staff who understands how to reach a more diverse demographic.”
Your current staff may already have brilliant ideas for expanding your marketing strategies to reach more people. If not, you may have to add a fresh set of eyes to your team to help you expand into other demographics.
You’re Unsure of What to Do Next
Sometimes you may just feel stuck. You may know you need to make changes but aren’t sure which changes will be the most impactful.
“Even though you are the CEO, you can’t be expected to know everything,” reminds Chris Thompson, CEO of Sober Sidekick, “Find a mentor you can go to on the days you feel stuck. A good mentor can help you feel confident in making big decisions as a new CEO. You don’t have to go it alone.”
Connect with like-minded entrepreneurs through the EO. A sense of community can make a big difference in any stage of your entrepreneurial journey. A mentor can help you bounce around ideas and bring a new perspective to your problems. Once you talk it through, you’ll understand what next steps can lead to success.
Be Bold and Make the Necessary Changes
Everyone outgrows their original business model at some point. Take it slow. Scaling up too quickly can be dangerous. Evaluate your business model regularly and adjust accordingly. These signs should empower you to make the necessary changes and set your company on the path to success.