Whatever the industry your business operates in, you will probably suffer from a limiting factor of some description.
Something that will limit your business’ growth potential.
At some stage, without careful management, you will reach the point where your growth is held back.
The first thing you need to do when trying to break through these barriers, is to identify what your limiting factors are.
These could be anything; here are some examples:
Geography
Unless you operate on a tiny island, you probably won’t have a real geographical limiting factor but many businesses have self-imposed geographical limiting factors. This limiting factor is often imposed by the business owner putting limits on what they want to achieve.
If you say to yourself I only want to work with clients in Maidstone, in Kent or in the UK then you are imposing a geographical limiting factor.
This is often because the owner isn’t comfortable traveling to the next town, county or country. There are barriers to operating in a different locations but these are not insurmountable.
Raw Materials
You will know if your raw materials are going to be your limiting factor. If you don’t know it yet, you will find this out fast. Careful management of this is essential because it will be easy to oversell more than you can supply.
Many years ago, I worked with a business that sold bottled whiskey, it was not a whisky producer, it just repackaged and sold it on. The whisky itself took a minimum of 12 years to produce and was always a scarce resource. Another client imported products from China with a six week lead time.
In both cases, knowing these issues in advance allowed the businesses to plan effectively.
Time
When a business relies on its owners, one of the biggest limiting factors is the time they have. When they have to do the work that the business does, growth will be limited because there is simply not enough time in the day to do everything.
The key for overcoming this, is first recognising that you are doing too much in the business and identifying what you need to do to stop doing it. The only way to get past this, is to make more time by outsourcing or delegating.
Cash
This is a big one; your growth will be held back if you do not have enough cash to fund it. To overcome this, you need to first identify that you have a problem, how big it is and when it will become a problem.
You can do all of this by creating a cash flow forecast. Traditionally this was done on an excel sheet, however, we have a number of tools that make this a much quicker and easier task.
You – The Owner
If your ambition is to grow a business, then you may be its biggest limiting factor. It’s unlikely that you have all the skills required to allow your business to reach its full potential. So to overcome this, you need to seek help from others to develop these skills.
Every business owner who wants growth, has to go on a journey. A journey that will take them from ‘Doer of the work’, through to ‘manager of the work’, to finally end up as ‘Leader of the Business’.
The first step when you have this problem, is recognising you have this problem. Then you either need to make it your mission to self-learn how to progress on this journey or find a mentor to help you on the way.
Unkink Your Hosepipe
If these limiting factors seem a bit obvious, it’s because they are. They should be easy to spot and, with the right help, overcome.
These limiting factors are like trying to water your garden with a hosepipe full of kinks.
By identifying and overcoming your limiting factors, you are straightening out these kinks and your business will flow much better.
