Challenges of Company Expansion
Whether a start-up or an established company, the growth process is always fraught with obstacles. As a company grows, it faces different challenges, as pain management specialist Jordan Sudberg explains below:
1) Economic challenges
When a company expands, additional funding will be needed, which may lead to problems if the business does not manage its finances effectively. With an expansion in mind, the company must hire new employees and increase expenses such as equipment, consumables, and other resources. Including the above spike in labor cost increases the budget of the company.
As the number of people grows within a work group and team, there will be a rapid change in technology, tools, and procedures between them. The employees commonly don’t have enough expertise to manage all new knowledge presented to them by the company due to this lack of communication. It is hard to communicate this due to the fast advancement of technology and new tools.
3) Change in focus
As a company expands, new products are created and introduced to the public, this is not a problem for most companies, and it is an opportunity for them. However, there are times that management needs to focus on and emphasize certain products to gain profit from them. This shift creates a shift in the new product’s marketing plan and other strategies that affect different businesses or departments within the company.
4) Additional responsibilities
As the business grows, it must learn new strategies to adapt to the growth, meaning that those who are part of the organization must also learn and adapt. In doing this, many individuals may face more work than they can handle, necessitating the entrusting of some chores to others. Jordan Sudberg points out that delegation is one of the biggest challenges a company faces when trying to expand.
5) Management challenges
The expansion may mean the company must hire new managers with different opinions and thoughts from the previous managers. The business must learn to integrate both ideas to run its operations efficiently, which may lead to confusion between management and other employees.
6) Cultural conflicts
As the company expands, it will have to adapt to different cultures within its operations, which may lead to cultural clashes. The idea of expansion may lead to new ideas and innovations that will influence the organization. For example, if the business expands overseas or internationally, agreeing with the local laws and regulations significantly accommodates legal issues. Managers must ensure that any changes in decision-making covering new procedures or processes are justifiable.
7) Legislative challenges
If the business expands, it will have to apply to different agencies and regulators with new regulations that require an explanation of new policies. This situation can create significant challenges in ensuring the company is ready for all regulatory changes.
When a company expands, it is vital that a strategy is well planned and put into action. The economic, legislative, and cultural changes are significant challenges one must overcome to ensure the company’s success.