Whether you’ve been a business owner for years or still working on your startup’s growth, you’re bound to cross paths with some obstacles along the way.
Whether you’ve been a business owner for years or still working on your startup’s growth, you’re bound to cross paths with some obstacles along the way. According to a recent study, only half of the modern businesses survive for more than five years in today’s competitive market, which is surely a grim statistic for entrepreneurs. While business failure can be linked to product demand, in most cases, it’s the organizational structure that makes or breaks a new business. Without further ado, here’s why your structure might be doomed to fail.
Flat Organizational Structure
When you start a business, it’s unlikely that you’ll find the funds to hire more than one manager – that being yourself. While that may work just fine at the beginning of your journey, as your business grows, it’ll eventually get exhausting when tens of employees report everything to you. It’s challenging to stay on top of everything when you have to micromanage your departments. Flat organizations may work just fine for a startup, but as you establish your company in the market, you need to learn to delegate and gradually withdraw until every department is taken care of without you having to personally supervise them.
No matter how motivated you are as a business owner, if your employees don’t have a clear-cut structure to follow, they will inevitably lose their motivation, which will in turn affect productivity and workflow. This goes especially for sales departments, where it’s your team’s responsibility to market and sell your product or service. This is why you should always offer incentives and compelling commissions, where your employees can share your success and earn a percentage of your profit. If you cannot offer funds, consider other benefits that could include accommodation, meals, or barter deals.
No matter how successful your business is, it’s bound to suffer losses at some point. The root of most business losses almost always boils down to poor internal structure, which inevitably reaches your customers who will lose confidence in what your company has to offer and your ability to fulfill their needs. This goes especially for startups that still haven’t been established officially as an LLC. The business gurus from ZenBusiness stress the importance of getting liability protection, which will render your company exempt from any personal responsibility for the company’s debt. While corporations are heavily taxed and can be subjected to lawsuits and liabilities, an LLC only pays taxes according to the earned profits rather than overall income.
No matter how innovative your product or service is, there’s always room for improvement. Many business owners make the mistake of only listening to their sales team, whilst neglecting their customer’s feedback, which only sets up their company for failure. A good business structure always makes room for customer critique, either through social media pages or through surveys. If it seems like the market for your product or service is declining, this might not be the case. Always get in touch with your customers and be open to modifying what your company has to offer, even if it means introducing a new line of service to the market.
Running a business is no easy feat, especially when you realize that you have to modify your business structure along the way to make sure that you keep your head above water. As a business owner, you should learn when you need to delegate tasks, while also making sure that you give credit where it’s due and do everything necessary to keep your employees motivated.