April 21, 2018    3 min read

The capacity for growth of SMEs varies greatly, due to their individual and often unique characteristics. They operate in different industries, differ in size, have different organisational structures and differing management styles.

However, closer evaluation shows that amongst all these differences, many experience the same types of problems, and these common problems tend to surface at similar stages in their business growth.


You’ve developed your product or service, have inventory stock in place and are set up to do business. The first and biggest hurdle is attracting customers. At this stage the small business owner is often the sole person responsible for performing most important tasks. Without adequate marketing knowledge, many small business owners have a difficult time raising awareness of their product to attract sufficient customers. When they do, the next challenge is to deliver a good enough customer experience that your customers keep coming back.

The start-up phase of business gives you the opportunity to try different things. Experiment to find out what works then stop doing what doesn’t. Seek customer feedback and put it into action, don’t assume that you know better; after all it’s your customers that will get you past the start-up stage.

Finance can be an issue at this juncture because the business needs enough capital to cover marketing and promotional expenditure. There are also costs associated with holding enough inventory stock to service new customers, as well as ongoing operational and running costs.

Without adequate finance, having customers is not necessarily enough to keep the momentum going at this point.


You have enough customers and the right product or service to satisfy them sufficiently to keep them coming back. With an offering that people are willing to pay money for, you can now demonstrate that you have a workable business venture.

But how do you turn this into a sustainable profit-making business. Can the business generate enough cashflow to stay in business or the revenue to finance growth? You need your revenue to outpace your costs and ideally to be building up funds to tide you over in times of low demand or even to cover the cost of replacing inventory stock or repairing the plant and equipment.

Pay attention to pricing and make sure the margin on each product or service is sufficiently covering your costs. Be sure to keep an eye on your cash flow, even when making a profit you still need the cash available to pay your bills when they are due. Consider ways to reduce your costs by improving efficiencies and reducing inventory waste through optimised inventory control.


Not only has your business survived but it’s really starting to thrive. This is where you need to start putting systematic procedures in place and start planning for growth.

Do you want to expand or are you happy to maintain the business at a steady pace? Even if you choose to keep the business relatively small in scale, you will need to continuously innovate and update to remain relevant to your customers.

You may even choose to employ a manager for the business and focus on new business ideas and opportunities. Alternatively, you can reinvest the profits generated by the business to grow the business, hire new staff or opening new stores.

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