One of the greatest challenges in the agency world is entering a growth phase…when you aren’t seeing much growth. In a perfect world, business growth would happen naturally in easy-to-predict stages, but that isn’t this world – chances are good that instead you need to grow, but aren’t seeing it happen. Here are the three top reasons it happens to agencies like yours, and what you need to make real growth happen.
1. Financial Management Issues
This sounds like a broad topic, because it really is – financial management stretches from day-to-day profits all the way to major capital and investment decisions. However, financial planning and consistent new business growth play integral roles when it comes to company growth.
This can take many forms. Perhaps poor cash flow management is holding your company back – you may struggle with accounting for where your cash comes from and where it goes at the proper time, a problem many new businesses encounter. As a result, agencies like yours quickly find themselves without cash on hand to cover supplies and overhead, and emergencies quickly dig into valuable reserves so there really isn’t much time to think about expansion at all.
Another common financial management deals with revenue and credit. If your credit policies and accounts receivable turnover are poor, you will probably never have enough capital to expand. Creating purchase strategies that get revenue into your hands in a timely manner can be a challenge for many companies. You want customers to have the ability to purchase your goods, but you can’t give them too much credit leeway or too many discounts, which will dig into your profits.
What do these problems add up to? A business without cash reserves that simply does not look very impressive on paper. And this is where we reach the investor problem: Business growth requires money, typically via business loans or perhaps a capital group. Banks and investors alike pay a lot of attention to financial statements, which means poor financial management – even in the small things – can keep you from getting the capital that you need.
2. Adaptation to Market Changes
This point is a bit more intangible, but still just as important when looking for reasons why your business isn’t seeing the growth you want: You aren’t watching the market closely enough, and you aren’t responding to it properly.
Part of this is an entrepreneurial issue: New business leaders tend to have a lot of energy and willpower focused in one direction, which means it can be difficult for these leaders to see related issues – and to change. Stubbornness has kept many a business from expanding properly.
Part of this problem is also simple business evolution: If your target demographic, preferred purchasing method, or the communication tools in your industry have changed, you absolutely have to change with them to find new growth.
3. Client Creep and Time Management
This is a subtler problem related to agencies that interact a lot with their customers and typically take on large client projects. Clients are your lifeblood…but they can also choke your own vision for your business. If you and your employees are spending too much time attending to client needs and tackling their complex projects, you may not have any time left to think about your own business and growth strategies. Pay attention to time management, and be sure to make time for nurturing and developing new business opportunities outside of your referral network.