Business growth problems and challenges are faced by every growing business – because they’re doing something new. Even if you are still doing the same thing, there will be new problems due to the bigger scale. There are new challenges for both the business and the business owner.

The skills of the business owner need to expand. They need to support the extra activities that the business is doing and the additional scale at which it is doing them. Some of the challenges are short-term, whilst others may have long term implications.

A growing business faces better quality problems because they are about how to deal with success, rather than how to deal with or avoid failure!

As these are new to the business owner, fore-warned is fore-armed, so let’s look at a few common challenges and how you could deal with them.

Business growth can impact on people in many different ways and this can cause a variety of problems for your staff.

For “growth”, read “change” – your growth programme may need careful handling as it is really a process of change management. Some people will be on board and enthusiastic, others will be concerned or reluctant to change because “this is the way we’ve always done it”.

There will inevitably extra work for some people and morale may drop if staff cannot cope with the extra work.

As a result, productivity can decrease and staff can burn out. If there are specialist areas where it is difficult to recruit new people, then this is likely to be a pinch point.

If you’re not careful, the first you may hear about any problem is when staff leave as workload gets too great. The willing and able staff may take on more and more until one day they vote with their feet!

Make sure you check in with people – particularly the willing and able ones. Don’t take them for granted as it may set you back significantly if they leave without warning.

One of the risks of people leaving is knowledge lost, particularly if it’s not documented. It can be difficult – if not impossible – to recruit new staff that have the right skills, knowledge, experience AND the right attitude. This can be a slow and expensive process with potentially a high failure rate!

New staff require an induction, mentoring and training. This takes time that you can ill afford during a time of growth. So look after and appreciate your key staff and mitigate the risk of them leaving.

Check also for signs of burnout – stress and illness can increase at these pressurised times of growth.

Everyone can do an extra hour’s work. Until one day they can’t do any work because they’re ill or burnt out.

Check whether everyone is taking their leave entitlement, look out for signs of stress and pressure. It may be better to slow down growth and keep people in place than to go too fast only to see it falter as people leave or burn out.

Consider what might happen otherwise. Those that stay pick up the workload – either willingly or unwillingly – of those that leave or are ill. Willing people do the extra work without complaining as they don’t want to add to your burden. Those that are healthy take on the work of those that are sick. People get over-stretched, they can’t do the work quite as well and productivity can collapse quite rapidly. Listen for what is not being said, don’t let them suffer in silence, identify where extra resource is needed and when to re-prioritise tasks.

Culture changes as a business grows. What was once small and intimate is now large and potentially disconnected.

Long-standing staff may not like the change, and handled poorly they see the culture get diluted with new people. In addition, the introduction of new processes required for larger teams might make some of them realise that they like working for smaller organisations or start-ups more than they like working for you!

A burst of growth represents a new chapter which may prompt people to take stock and wonder whether now is a good time to move on.

Have you got any linchpins? A linchpin is someone who is so critical to the business or an area of it, that without whom it all – or part of it – collapses. All the key knowledge is in their head and everyone relies on them. Assess your vulnerability and plan accordingly.

Try to avoid having linchpins who hold your business success in their hands. Get others to learn what they do, make a plan in case they leave, get them to document what they do – minimise your exposure to linchpins.

One of the more significant business growth problems is that managers – including business owners – become overwhelmed. They may be firefighting and reacting to crises and problems caused by growth during a time when they should be driving it forward.

They become focused on the urgent not the important.

Major issues can go unresolved until it’s too late.

The pressure exposes what you thought were strengths as weaknesses.

Make sure that when focusing on your staff, you don’t take your managers for granted – including yourself!

The increased need for delegation as a business grows requires new working practices to be adopted and new skills to be learnt – particularly soft skills and delegation skills. Just when great management and delegation skills are being developed, they are needed most! There is a high chance of getting delegation wrong and learning the hard way.

Working under the pressure of growth targets, people may hide their performance if things aren’t going well. They may not share bad news until absolutely necessary, by which time it is too late. In this situation the business needs good clear communication and delegation skills.

There is a paradox here. It is difficult to give true oversight if you don’t have time, and yet it is because you don’t have time that you delegated in the first place!

When growing a business there are so many moving parts that there can be an understandable desire to make sure all the elements work and get involved in the detail of what everyone is doing.

Don’t micromanage! You haven’t got the time and people don’t like it. It undermines the relationships with the team. It can stifle creativity. People then won’t do anything without checking with you first, because that’s the behaviour you’ve taught them.

The team are there to save you time, not to be an extra time burden.

But if you don’t manage the detail, you might lose control of critical activities, which is another risk of a growing business.

When managing others, it is necessary to strike a balance between control and oversight on the one hand, with trust and autonomy on the other. You can’t and don’t need to micro-manage. However a laissez-faire attitude won’t work either as you’ll lose too much control at a critical time.

One approach is to make the framework for delegation clear at the outset. Make sure you clarify specifically what is expected, i.e. what needs doing and any essential elements of how it is done. Make sure that you are clear in your own mind and communicate where there is freedom and where there isn’t. In management guru terms, establish clear “tight-loose properties”. Some things you need to control tightly. Other things you can hold loosely and leave the team to do as they judge best.

Think carefully about the information you need to maintain control. Set people targets and indicators. Include some process and activity indicators will that pick up what isn’t happening early in the process, giving you time to react if things aren’t going well.

In a small business, one-off problems are quickly dealt with. In a larger business, problems multiply and can be categorised with what they have in common.

So, identify problems and develop effective systems to deal with them. Either design systems to deal with them in future or to prevent them in the future.

Systems are great, but if they are not controlled and are not under your control, then they are dangerous – they are literally “out of control”.

Systems should be sets of processes and procedures designed to produce an end result with a certain level of quality. You need controls in place to make sure that all happens as planned. Trusting people isn’t a strategy as it can have expensive consequences! Instead rely on systems and controls.

Put in place systems and controls to prevent things going wrong and some additional controls to detect when they do. Put controls in place as early as possible in the system to ensure that you have the breathing space you need to take corrective action.

Extra pressure on time means that quality can drop as people get busy – and “getting it out the door” becomes more important than getting it right. Initially no-one notices standards slipping. People give reasons and make excuses. You may find that complaints go up or customers vote with their feet.

Be clear about which elements are critical and valued by the customer and which ones could be reduced.

When growing there can be a temptation to buy in bulk to secure cheaper unit costs. There is an assumption that you will sell them all as you are intending to grow. However, you need to test this assumption. If your growth plans don’t succeed or take longer than expected, then obsolete stock will saddle you unwanted costs.

It may be better to accept a reduced gross margin and buy smaller quantities until your growth plans look like they are working before expanding quantities.

As your business grow you may trigger new red tape requirements which you inadvertently fail to comply with, leading to fines and unexpected costs. For a small business these can be new requirements for staff, pensions and VAT for example.

Find out in advance which thresholds you might trip over in the coming year and be ready to deal with them at the right time.

If you operate from premises then you are likely to outgrow them as you expand your business. There brings with it extra fixed costs and the disruption of the moving process. The temptation is to put off getting larger premises. As a result, you can put too many people into a small space that makes it over-crowded and inefficient.

An alternative solution is to add satellite premises separate from the main location, the risk here is that communication breaks down and separate cultures emerge. Selecting and moving premises is also not straightforward as there are many moving parts.

Planning ahead will of course help. Determining the right time to move and who to move when are also factors.

You can turn new premises to your advantage. Simply making statements to the staff team that the business is growing. If you do this well, the team can feel a sense of ownership of “our new premises”.

It can also be an opportunity to change working practices. You can physically configure people in different ways to better suit the desired ways of working. Maybe some noisier teams need to be located away from those that need quieter space, or working relationships and communication between teams can be improved by locating them together.

Everywhere you look there are potential business growth problems! Having read through all these potential challenges, you may even be wondering why any business would want to grow!

There is a point to setting out all these common business growth problems. It is to help you think systematically through each area of your business. You can then identify the challenges that might arise for you and consider how best to prepare and gear up for growth.