Almost all innovation businesses come up against barriers at some point in their growth journeys. The key to overcoming them is identifying possible challenges ahead of time in order to make a plan of action. However, this can be easier said than done, especially if you’re new to running a small to medium sized business or entering a new market.
We caught up with Innovate UK EDGE Innovation and Growth Specialist, Shirley Mansfield, who helps businesses overcome obstacles to business growth.
Discover expert insights into growing your business and gain the tools needed to succeed...
What are the challenges of business growth?
Some of the most common obstacles the companies we support come up against time and time again include;
- Money - either a lack of funding or confusion around financial management.
- Business planning, not acting - counter-intuitively, businesses can get too focused on their long-term goals and ignore the short-term tasks needed to reach the next step in their journey.
- Market and customer issues - businesses often come to us when they aren’t getting enough interest in their products and services or can’t find the right customers for their proposition.
- Pricing and profitability - commonly, businesses look to us for help with pricing, margins and profitability.
- Adopting a business mindset - businesses are often trying to do it all themselves, without making use of contractors and external support.
Let’s take a deeper dive into some of these issues and their solutions...
Money: Funding, finance and cash flow
Funding constraints are a crucial issue for many innovative businesses. Without the cash, business management and operations are impossible and expansion plans can be put in jeopardy.
Innovate UK EDGE helps SMEs to make sense of the many funding and finance opportunities available, advising on the best options from regional, national and international sources, both public and private, to support your innovation and expansion plans.
For example, many businesses and SMEs are often unaware of the R&D tax relief credits available to them, and this is an area where an experienced Innovation and Growth Specialist can really add value.
But the problem isn’t always sourcing funding. Businesses can also come up against difficulties when it comes to funding allocation. Without significant prior experience of running a business, understanding where to direct money and when can feel overwhelming.
A specialist can help with cash flow forecasting, helping you to manage the cash that comes in and out of the businesses and, vitally, prevent it from running out!
Business planning, not acting
Shirley often advises her clients to ‘stop writing a business plan and do the planning’.
Sometimes, business owners can get so caught up in their 10-year business model that they ignore the smaller steps that can be implemented now to move them to the next stage of their journey.
Shirley recommends a 90-day planning timeframe to keep the focus on what can be done at present to accelerate success. This shorter-term action planning is often more effective as it prevents businesses from getting ‘stuck’ with impossible to-do lists and unrealistic future goals.
This process of ‘plan, act, measure and refine’ has been a recipe for success for many of her clients.
Finding the right market
When sales traction slows, this is often a sign you’re targeting the wrong market or your sales messaging is wrong for your audience.
Have you put yourself in the customer’s shoes? When you’ve got your head down, it can be easy to forget your customer’s needs and pain points. Sometimes, an outside perspective can help make you aware of changing market needs.
Further, whether it’s tapping into a target audience through new media such as podcasting, or attracting the attention of the right people through personalised letters, Shirley’s clients have benefited from outside-the-box thinking to cut through the noise.
As your business grows and develops, it’s likely you will also need to enter new markets to expand and scale. Our specialists can provide the real-time support, connections and insights needed to break into new vertical and international markets.
Sales planning, pricing and profitability
Correctly pricing products for profitability requires a lot of thought, process and experience. Factoring in margins, sales and marketing efforts, inventory management and everything else that has gone into creating, developing, producing and distributing your product can be complex.
Allocate time for sales planning and spend time working with an Innovation and Growth Specialist to ensure no element is forgotten.
A good sales plan will also take into consideration the sales funnel, identifying possible pain points and areas along the chain where customers could be getting ‘stuck’.
For smaller businesses especially, the mindset and personal goals of the business owner are often what can really drive success.
If you’re transitioning from corporate, tasks that were previously the responsibility of the IT or customer service department now fall in your lap. This is where resource allocation, outsourcing and delegation becomes vital. Learn to source trusted contractors and staff to deal with the day-to-day responsibilities so you can focus on growth and scaling your business.
Internal and external barriers to business growth
The issues highlighted above aside, every business will face different challenges throughout their development, depending on their market, sector, geographical location and availability of resources. However, there are some common themes that most businesses will come across at some point in their journey.
These obstacles can come from both internal and external sources, and it’s important to identify these in order to overcome them.
Internal barriers to growth
Common internal barriers to growth include;
- Finding the right staff
- Access to resources and materials
- Ignoring business performance indicators
- Disregarding the competition
- Inefficient processes and internal infrastructure
- Management issues
- Weak marketing strategy
- Unsustainable business models
- Out of date technology
- Lack of collaboration
- Lack of creativity and innovation
External challenges can pose more of a problem, as the current political and economic climate is often outside of our control. However, understanding the potential issues and being aware of the support available to UK businesses can help you continue to grow.
External challenges could include;
- The impact of Brexit on supply chains
- COVID-19 disruptions
- Legal issues such as the impact of IR45 on contractors and the Making Tax Digital update
These external factors can disproportionally affect different businesses. For example, we’ve all seen the devastating impact COVID has had on the retail and hospitality industry over the last year, while some businesses have experienced a boom in online sales.
While an increase in online sales sounds fantastic, a sudden boost of this scale can cause havoc on other parts of the business. One Innovate UK EDGE client, Cauldron Science, experienced this first hand (although please note it received support in 2020 when we were known as Enterprise Europe Network).
Breaking business barriers with Innovate UK EDGE
Often, barriers arise because many small businesses develop out of a passion for an idea or new technology but can hit a wall when certain business management skills are required to build the kind of company that can be sector leading. That’s when it becomes advantageous to collaborate with someone who’s helped other businesses develop successful growth plans.
Innovate UK EDGE’s specialist-led service helps any innovative business of up to 500 staff with high growth potential to tackle challenges and realise opportunities, such as:
- Business strategy and planning support
- Connections to the innovation ecosystem
- Exploiting intellectual property
- Sourcing funding and finance
- Pitching support
- Finding partnership opportunities
Find out how we can help you to grow and scale.