Early on in my business, I took on a partner because I didn't have enough confidence in myself to lead an organization alone—even though I had managed large teams and initiatives for years prior. My imposter syndrome got the best of me and I brought in someone who wasn't a match. Business growth was a challenge because we had conflicting working styles and our skills didn't line up. The conflict ended up costing memy business, money and time. I had to endure a tough experience to gain my confidence, find a more feasible growth strategy, pick up the pieces of my broken business and build something better.
Women of color face a unique set of challenges when it comes to building a business. Even as our numbers grow in business ownership, we remain underrepresented and have a harder time securing funding. Evaluating the challenges other women founders faced helped me develop better strategies for business growth. I hope they help you too.
1. Strategically Scaling Business
Scaling your business is a good challenge to have. However, trying to take on too much, too soon, without the right strategy in place to support business growth is a recurring downfall for many small business owners.
“We had this really grand vision of a technology platform and built it out too early. We wound up having to scrap it," she explains.
Like many founders in her position, Shewey faced a hard decision: let the business go or reinvest in herself and her vision. Ultimately, she stuck with it.
“Starting over seemed impossible at the time," she shared, “but the reset allowed us to focus on growing the company in a more sustainable way and immediately provide value to our customers."
Her advice to other women of color looking to scale their businesses is to get a solid understanding of your customer base and develop a strategic plan.
“Once we started to get traction with more customers," she explains, "the roadmap became much clearer for what we needed most to scale as a business."
Growth strategy ensures that you have a plan in place to work on the right things at the right time. It also helps you predict future challenges and adjust accordingly.
Many business owners are hesitant to spend on hiring a strategist to help them prepare strategic plans (i.e. product, brand, marketing, etc.), thinking that skipping to tactical tasks such as development or design will save money in the long run. But, in my experience, that couldn't be further from the truth. Investing in sound strategies early can help ensure you work on things that provide the most return.
2. Managing Cash Flow
Cash flow is another common pitfall that plagues business as they scale. If your client changes plans, doesn't pay on time or doesn't pay at all, you could end up strapped for cash, even while handling seemingly profitable contracts.
The importance of incorporating cash-flow management into your business growth strategy cannot be overstated. Teneshia Jackson-Warner, founder and CEO Egamigroup, a full-service multicultural marketing and communications agency, shares her experience.
“As we grew, we were taking on Fortune 100 clients and along with each came longer payment terms," she says. "Over time, this placed a strain on our firm's cash flow."
Jackson-Warner identified financial solutions to support business growth and cash-flow management.
“We were able to obtain a small business line of credit through our long time banker."
She was also able to work with clients to renegotiate payment terms.
“Oftentimes, clients will have solutions," Jackson-Warner explains. "For example, one of our leading clients had a factoring program with our banker."
Sometimes the simplest financial solutions can help improve your cash-flow management. And learning how to better manage cash flow is a necessary step in your growth strategy.
Investing in sound strategies early can help ensure you work on things that provide the most return.
3. Appealing to the Right Investors
Minority women business owners are noticeably missing in venture capital. Yet Megan Holston-Alexander, senior investment associate at Unusual Ventures, an early-stage venture capital firm, says she often encounters founders who are not open to incorporating feedback into their growth strategy. But she encourages them to think twice about that.
“It's like a marriage," she explains “There has to be trust, openness and support. And most of the time, your investors have seen something similar to what you're going through and can offer important insights."
Her advice is to “do research to see who tends to invest in the space you're playing in." Sometimes selecting the right fund to match your stage and industry is a critical step to acquiring the funds you need for business growth.
From investing in proper planning to better money management, implementing a growth strategy is valuable to any burgeoning business. This is particularly true for women of color founders who may be forging a new path on their own. Avoiding the above pitfalls could help make the difference between business failure and business growth.
Read more articles on planning for growth.
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