There are hundreds of technology companies starting new businesses every day, but the reality for most of them is that they will fail. There are several reasons why, but it’s hard to feel sympathy for companies that have weak ideas, terrible execution, and no idea what they are doing.
What is upsetting is seeing good business ideas going under when they try to expand. While growth is, for the most part, a sign of success, there are inherent challenges that crop up time and again for tech companies, and today we’re going to go through some of the toughest. Read on to find out more and give your growing tech business the support it needs!
First of all, not everyone can manage the stresses and strains of growing a business. It takes time, dedication, and a lot of effort to ensure any kind of success, and the reality for most entrepreneurs is they will need to work 25 hours a day to achieve their goals. It takes you away from your family and social life, and it’s a huge sacrifice that not many people are ready for.
You can start a business with relatively little money, but growing is going to cost you. But what sort of loans and investments should you be looking for? If you’re asking ‘tell me more,’ there’s plenty of funding info online, but in simple terms getting small business loans, investment from angel investors, and freeing up profits can be a lot trickier than you might think. You need to prove your progress so far, and also have a fully costed, realistic plan for expansion. Not only that, but you will have to show that you and your current team have what it takes to get to where you want to be.
As your business grows, be aware that your ability to produce will have to improve significantly. You will need to hire extra staff, be wary of annoying your loyal customer base and be very careful of standards slipping. It’s an entirely different ball game, and an inability to keep up with demand could sink your company within months.
Another issue is timing. You might think the moment is right to start investing in more employees and raw materials, but what happens if demand falls back to previous levels? You will be left with tons of product and staff, none of which you can afford anymore. And the result will often damage your company finances beyond repair.
Managing a global, corporate enterprise is a different kettle of fish to running a small business in your garage. Sure, the likes of Steve Jobs might have achieved it, but the vast majority of people aren’t equipped for it. Your team will grow fast, and everything from basic operations and marketing through to setting up career goals and health and safety will be hard to deal with. Ultimately, you are going to need a lot of help, with more experienced heads coming in – which brings us to our next point.
The chances are that the people who you start your company with will not have the skills you need to run a big business. You can find a place for them, of course, but you also run the risk of putting their noses out of joint. There are plenty of tough decisions to make, and unless you are steely enough to get over them, it can have a detrimental impact.
As you can see, there are plenty of challenges to face when it comes to rapid business growth. How will your small tech company deal with the changes?