Growing your business comes with all varieties of challenges and road blocks. From financing to staffing, finding ways to scale your operation is tough. The rewards, though, are immense.
We asked four small business owners to share the biggest challenges they faced while growing their businesses. Their answers are inspiring and may give you just the boost you need to take your business to the next level.
Challenge: Finding funding
Inger Ellen Nicolaisen, owner of Nikita Hair, which now has more than 150 locations in Europe and is now franchising in the United States.
Launching a business will seemingly consume all of your energy, but there will hopefully come a time when you feel comfortable with your flagship business. You may even find yourself tossing around the idea of expansion, whether that means expanding products and services or adding new locations.
Either way, finding the funding necessary to grow my business was a challenge I faced in the early stages. The key is maintaining the drive and energy to expand while acquiring the capital, which is not as simple as it may seem. Lack of cash flow can stop the growth of your business in its tracks. The majority of business owners seek out business loans, which are great when you need a lump sum investment. However, there are other ways to support growth and build a stronger business at the same time.
I worked with suppliers to contribute to the funding of my business. This method involves establishing strong, long-term partnerships with suppliers, which benefits both their business and yours so that the both of you can grow together. Basically, you’re reducing cost in exchange for loyalty and continued business, something that’s mutually beneficial.
Challenge: Adjustments to personal life and a new location
Jason Sadowski, owner of Walk-On’s Bistreaux & Bar in Fayetteville, N.C., with ten more locations planned.
For my wife and I, growing our business meant relocating several hundred miles away, so when we agreed to open 11 Walk-On’s locations in the Carolinas and Georgia, we knew we were going to have to make some considerable changes to our lives. We were living in Texas at the time and felt the need to be closer to our future restaurant locations. Both of us grew up in the area and had extensive family and support, as well as many business contacts in our network, so relocating to Charlotte, North Carolina felt like starting over — it was definitely one of the biggest challenges we’ve faced, personally and professionally.
When growing a business across state lines, there are dozens of things to consider, which is why I’d advise anyone who is opening a new business in an unfamiliar state to get an attorney and accountant that you trust to help navigate laws and regulations you may not be aware of. Finally, maintaining the integrity and culture of your business is crucial — it’s what made your business successful in the first place. That said, transporting the Walk-On’s culture from Southern Louisiana to the Carolinas was stressful. We ended up bringing in veteran team members that knew the culture to help us build a rock star team here in the Carolinas. When enduring tough times, it’s important to remember that it’s only temporary. The people here in Charlotte are truly amazing; and while our first year was a bit of an adventure, we are settling in quite nicely now surrounded by some new great friends.
Finally, maintaining the integrity and culture of your business is crucial — it’s what made your business successful in the first place.
Jason Sadowski, owner, Walk-On’s Bistreaux & Bar
Adjust
These four business owners found ways to adjust during challenging times in order to support their businesses' growth. Does your business need help growing? Read more here.
Challenge: Consistency with brand, culture and effective hiring
Andrew Diamond, president and CFO of Angry Crab Shack, Mesa, Ariz., which was founded in 2013 by formal NFL player Ron Lou, and has since grown to six corporate locations and three franchise locations.
When we first launched Angry Crab Shack, it was unlike any other restaurant in Arizona. Our menu was heavily concentrated on bold flavors and spices, with a bold and approachable culture to match. Our atmosphere and character were new to the valley, which is probably why the business took off so quickly. It’s incredibly challenging to build a brand while expanding to multiple locations, which is exactly what we were doing.
Before our one-year anniversary, the second location was open and still we were busting at the seams with customers. Over the next two years, we opened four more locations. All this to say, sometimes monetary resources are the least of your concerns when it comes to rapid expansion. Instead, we needed to maintain culture, structure and standards.
As you expand, it’s important to hire quality managers, accurately train staff and promote new locations all while ensuring current locations maintain the same standards — not to mention the time needed to improve and innovate based on guest feedback. Throughout this process, we leaned heavily on our corporate human resource team in order to properly expand while innovating the menu, improving our processes and solidifying our brand. To be successful, we had to rely on the strong culture we built early on and our market research for newly signed leases in the Phoenix metro area.
Challenge: Scaling for growth
Brandon Holcomb, owner of N-Hance Wood Refinishing - Alpharetta, Ga.
When I initially started my N-Hance Wood Refinishing business, we quickly jumped to $20,000 to $30,000 in gross revenue per month, which seemed to be an easier task than growing it in year two to what we do now, which is $45,000 to $60,000 per month.
After a while, you understand the numbers better and can better predict monthly expenses, but I felt I still needed guidance to help me prioritize the tasks required to scale my business to a more stable and profitable operation. I reached out to a business operations coach at the N-Hance corporate offices who gave me some great feedback.
To make a profit, I needed to invest more money in labor and staffing (a daunting thought after investing so much already). Additional challenges come with hiring and onboarding new employees, as it takes time to properly train them to the point where you can trust them to do the job right. In order to offset the additional labor costs, I immediately booked 3 to 4 jobs per week — double what we had been doing.
The first month was overwhelming and I remember feeling somewhat defeated with the idea of growing my business to this level of profitability, but I knew from talking with other N-Hance franchisees that it could absolutely be done. We pushed forward, took some losses on a few projects as the guys learned our process and were able to match their quality work with a balance of working efficiency. The very next month we did $65,000 in revenue and earned $30,000 in net profit alone!
The biggest takeaway I learned through it all is you need to anticipate and budget for these growth stages. You'll likely lose money at first, but the expense is worth the long-term gains in profit. I look at growth just like any investment, something that requires some risk and a lot of patience, but has a business plan behind it to eventually provide a larger, more consistent return. My advice when scaling and growing a business is to budget accordingly so you have the capital means to invest and plan for short-term losses in exchange for long-term gains.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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