Every stage of the development of small and medium-sized enterprises (SMEs) will encounter different difficulties, especially during the early stages of establishment. Based on my own experiences, I analyze the following aspects to break through the initial bottlenecks faced by SMEs.
1. Corporate positioning issues
During the early stages of establishing a business, the most common issue that arises is positioning. Entrepreneurs start their businesses with great hope and continuously strive towards their ideals. Often, new businesses start with clear positioning, but soon after, problems arise such as insufficient management skills, inadequate capital reserves, and operations not meeting expectations... At this point, most companies begin to repeatedly change their positioning, ultimately getting completely lost in the vast sea of commerce...
Before establishing a business, it is crucial to reserve as much capital as possible and avoid blindly rushing into things. Once a clear goal has been set, it should not be easily changed. To survive, some changes can be made strategically or operationally, but these should never affect the company's positioning. Companies with unclear positioning find it difficult to sustain long-term success.
2. Blind expansion of corporate scale
Who among business owners doesn't want to make their company bigger and stronger? Those without such aspirations are unlikely to jump into this ocean of hardship. Many people like to say that dying from overexpansion is better than starving to death, so they quickly expand their businesses only to encounter problems. Blind expansion can lead to management levels not keeping up, team member capabilities lagging behind, and operational capital being excessively stretched... The consequences can be severe: insufficient funds leading to blind restructuring, insufficient team capabilities resulting in hasty recruitment, and eventually causing an unwieldy tail that’s hard to manage.
After operating for a period of time, a company should consider expanding, but this must not be done blindly. First, one must carefully consider whether the cash flow is stable, if the utilization rate of funds is maintained at a normal ratio, if the team members' abilities can keep up, and if the operators have sufficient experience to run the business... Every aspect requires serious thought.
3. Placement of the founding team
Most SMEs are family businesses or similar to family businesses, with the founding team often consisting of the entrepreneur's relatives, friends, classmates, or colleagues with whom they had good relationships. However, as the business progresses, there will inevitably be some team members who cannot keep up with the pace of the company. At this point, some companies may recruit new employees to inject fresh blood, but how do new employees integrate with the old ones regarding responsibility, obligations, and power? This becomes a headache. Some companies might think of directly eliminating the old employees and bringing in new ones, but then the question arises: how to properly place the old employees? Chinese people value righteousness, and at this stage, significant issues may arise in the operation of the company...
To be continued....................