Key Challenges Young Entrepreneurs Face While Growing Their Business

Written By: Ellis Orlan, CPA (IL), CGMA, Partner, Fuller Landau LLP, Toronto, ON, eorlan@fullerlandau.com, Futurpreneur Canada Mentor

All successful young entrepreneurs eventually face the issue of handling business growth and expansion. With business growth and expansion, comes both opportunities and perils.

On the one hand, business growth often carries with it a corresponding increase in financial fortunes for owners and employees alike. In addition, expansion is usually seen as a validation of the entrepreneur’s initial business start-up idea, and of his or her subsequent efforts to bring that vision to fruition. On the other hand, business expansion also presents the small business owner with myriad of issues that have to be addressed, since growth causes a variety of changes, all of which present different managerial, legal, and financial challenges.

Growth means that new employees will be hired who will be looking to the top management of the company for leadership, that the company’s management will become less and less centralized, and this may raise the levels of internal politics, protectionism, and dissension over what goals and projects the company should pursue. Growth also means that market share will expand, calling for new strategies for dealing with larger competitors not only in their local markets, but also in other provinces and internationally. Additional capital will be required, creating new responsibilities to shareholders, investors, and institutional lenders. Thus, growth brings with it a variety of changes in the company’s structure, needs, and objectives.

Given these realities, the desire of the organization to pursue growth opportunities, must be tempered by the need to understand that meaningful, long-term, profitable growth is a direct result of effective management and planning.

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