When you are talking about startups, five years is long period of time. It is more than enough to understand whether the startup is going to survive or not. Why? More than 50 percent of business models implode and fail within a span of five years.
When a company turns five years, it is an important milestone. If it is growing at a fast rate, it is big, too big to be called a small company. However, it is not so big as to be considered a unicorn company. What this translates into is the pains that are associated with the growth of a company.
Sir Richard Branson describes this stage as the toddler stage where the company is trying to learn how to walk, talk, and eventually run. So what are these challenges and how do the startups or young companies overcome them? Let’s have a look:
Hiring Employees and Managing Them
One of the most common problems that a growing startup has to face is employee acquisition or talent acquisition and then the problem of managing them. A company that is striving for growth and expansion has to face the challenge of growing their operations, which means hiring more people.
Hiring more employees not only means you need to manage this emerging workforce, it also means that you will need to get a bigger and better space to accommodate those employees, giving them enough breathing room and to be able to hire more people when your company needs to do that. This means that you need effective tools and software to manage both workspace as well as a workforce.
Instead of trying to do it all by yourself, it is recommended that you use a professional workspace and workforce tool like Asure Software. It is the only HCM software that will enable you to manage payroll taxes, salaries, employees, human resources, benefits administration, and more all in one place.
Cash Flow
So what happens when you are facing cash flow problems and the company is on the verge of insolvency? Voluntary administration. It simply means that you are going to hand over the administration of your enterprise to the administration as you do not have sufficient funds or cash flow. This is why you keep hearing the catch phrase “cash is king.” Most companies end up focusing too much on their annual accounts. It is not enough that your annual accounts are looking in a healthy state, cash flow is equally important.
Uncertainty
When you are running a startup, there are two different forces at work at all times and sadly, both these forces are working in the opposite direction. The first one is the power of change, technological advancements, and all the innovation that is the driving force behind change which is constantly in motion.
But on the other hand, there is another force that is equally powerful and working in the opposite direction, and that is the power of uncertainty. The startup world is full of examples where the entity was taken by surprise leading to their demise. Globalization, financial constraints, and disruptive technologies are the reasons behind this force. In order to counter this problem, companies need to focus on long-term goals rather than short-term goals and stop acting near-sighted.
Time Management
When your company’s business is growing at an unprecedented speed, time becomes a constraint. The trick of the trade here is that you need to make some time in your busy schedule to manage various aspects of your business. Managing your tasks, meetings, and daily schedule can become challenging but all the same extremely necessary. This is where productivity tools and growth hacks come to the rescue.
You can also use a separate calendar that is shared with your employees and your close team so you guys are in the loop on who is working on what and when. This creates accountability and in case something goes wrong, you know who to contact. It can also help prevent overlap, you know, two people working on the same thing. That leads to waste and lower morale.
Give Control
Lee Lacocca once famously said – I hire people brighter than me and then I get out of their way. This is what you need to do. You have to learn to trust people and give them control. You cannot possibly control everything all by yourself. You are not an expert on everything. So hire people who know their job and trust them. Allow them to make decisions and allow them to take their department and the company to new heights.
Once they begin to soar, you can delegate more work and more responsibilities to them and to others, and this will leave you free to work on other aspects of your business and to enable you to do your job better.
