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Getting over the growth hump

30th August 2017

Getting over the growth hump

It’s received wisdom that between 40% and 50% of all new businesses fail within the first five years. There are many reasons for failure, some of them completely out of the hands of business owners, but a key point comes when the business faces what’s known as the ‘hump’.

What is the hump?

Businesses face a range of challenges over the years. For small businesses, the first hump often comes in the first 3-4 years of business. Having started the business, established it and become relatively comfortable with how things are going, owners reach a point where they have to make a decision – take the risks that are necessary for growth, or keep going the way things are? How you react to getting to this point in your business will define what happens for the next few years. You may need to:

  • Move out of the home office into business premises;
  • Secure further investment;
  • Employ your first staff member;
  • Change or expand your product range;
  • Sell your products through bigger distributors;
  • Buy new equipment or machinery.

Each of these may feel like a risk, but equally, they are all manageable risks if you approach them in the right way. You might want to talk to a business mentor at this stage, who can give you experienced, objective advice and help you to take the right decisions at the right time.

Is there a trick to managing the hump?

Unfortunately, there’s no quick and easy way to bypass this stage of growth. You’re probably in for a lot of hard work – but there is plenty of help out there, and once things have settled down, your business will be in a fantastic place to help you grow the way you want to.
The main things to remember are:

  • Ask for help – all your professional advisers such as accountants and solicitors are able to help you set out a plan and see what needs to be done. Don’t try to do it all by yourself.
  • Have a strategy and break it into individual plans – planning is everything. Doing things in the right order makes the best use of your time and your money, and helps to keep everything feeling a bit more manageable.
  • Read around the subject – there’s lots of information on this stage of growth, much of it from people who have both failed and succeeded. Learn as much as you can and look for advice that you can apply to your own situation.
  • Be prepared to be scared – like all adventures, your business will regularly push you outside your comfort zone. Embrace change, and find positives to take from all your actions.

If you think you’re experiencing a growth hump, or you can see it coming around the corner, now is the perfect time to talk to us – we’ve helped lots of small businesses set and keep their growth plans. Just contact us today.

CLIENTS WORDS

I have dealt with various staff from Wise & Co with different degrees of seniority over the last 13 years. I have found them to be extremely capable and nice people to work with.
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