Most small business owners can’t afford to think small. They always need to be mindful of growth strategies that will help them achieve long-term profitability.
But becoming profitable often requires business owners to work long hours on a shoe-string budget. They don’t always have time to implement systems that will support them when they’re ready to scale. Many entrepreneurs start out using free or low-cost software solutions that help them get started, but eventually they need to upgrade to more powerful software as their business grows.
Here are some signs that may mean that it’s time to upgrade your current systems to support your small business as it grows.
1. A growth spurt
If you’ve noticed, month after month, your profits are continually increasing, it’s likely time to increase capacity. Beyond financial growth indicators, at this stage, you may have already noticed a need for change. You may have experienced:
- A spike in the number of buying customers, which has stressed your current systems, resulting in service delays.
- Internal bottlenecks which have negatively affected productivity.
- Poor cash flow because your simple systems for invoicing, billing, and collecting can’t keep up with a growing business.
If you’ve experienced any of these issues, you may need to consider hiring more staff or implementing new systems.
2. Increased errors
Too many mistakes may directly result from capacity issues, from sudden increased growth or a sign your systems aren’t the right fit.
Errors are a serious problem and pose an enormous risk to the long-term sustainability of the company. For example, basing decisions about inventory supply on inaccurate numbers could result in lost orders or not being able to fill them. This can lead to frustrated customers who may decide not to do business with you.
Check out your systems if you notice consistent mistakes in one or more areas of your business. Then you can make upgrades to eliminate frustrating and costly errors, and increase overall efficiency.
Tips for implementing new systems
Change can be a challenge for businesses, but a company can’t reach its full potential without it. The key is to stagger big changes over time and overlap the implementation of new systems to minimize service disruptions.
Follow these tips when it’s time to upgrade your business systems:
- Review your plans for your business. Where do you hope to be? How will you get there? Get clear on what your business needs are in the short and long term. This will help you decide on the right financial management, inventory, and customer relations management systems.
- Shop around for user-friendly solutions that can address multiple needs. For instance, your online accounting system may also offer inventory management. Take care to choose systems that integrate easily with each other to maximize efficiency wherever possible.
- Share plans to implement new systems early with your employees. Discuss together how a new system will solve the problems. Staff will be more eager to embrace change if it improves their working lives.
Small business owners should know about their business systems and notice when they become obsolete. They don’t want to watch their businesses stagnate because their systems can’t keep up with business growth.
