Have you ever wondered how to overcome difficult issues or problems? Wait a minute. What does that mean? Difficult issues and problems? How does one define a difficult issue? You can assume that anything that makes you feel stressed or that prevents you from performing your job adequately qualifies as a difficult issue or problem. A difficult problem indicates a person, place or thing that is causing interference. A difficult issue implies difficulty that is not necessarily tangible. This might include something that cannot simply be hidden or expelled. A difficult employee can be fired. An offensive picture can be taken down from a wall. However, a major scandal that every news outlet has covered cannot be erased. This is a critical issue, and one that may leave you clueless on how to resolve it. Let’s start by considering some of the most common problems reported in any organization.

Dealing with Difficult People

It’s easy to address difficulty issues with inanimate objects. If a tool is not functioning properly then it should be replaced. However, when you’re discussing people the issue becomes far more complex. It is true that people can be “replaced” just like tools. For the most part, employers will understand that building a cooperative team effort is important and that any divisive element (even a likable person) may have to be dismissed. Sometimes this could be a difficult issue for co-workers, if the difficult person is liked by management or possesses some valuable skill that disqualifies him from firing. If this is the case then co-workers must try to co-exist with that personality without making a public commotion.

This issue becomes challenging however, when the difficult people are actually people that you need. You may have to deal with difficult students or difficult customers at some point. Striking out at them or even demanding that they leave the premises, may not be an option if you have limited authority. Furthermore, such action is usually not in your best interest, since they are your “clients” and are essentially the reason you are in business. How do you go about getting along with difficult people?

Strategy 1: Dealing with Difficult Team Members or Employees. First consider how you can handle a difficult person. Always try and remain calm. Remember that the feelings you display are contagious. Getting angry or becoming insulting with a difficult employee will provoke him or her to further argument. Try and keep communication on a positive level and emphasize that disagreement is not personal. The primary rule of conflict management is to avoid win-lose arguments at all costs. You do not want to “win” or inspire competitive feelings in the difficult student. You want to emphasize problem-solving; in essence, giving the employee a dignified way out of the conflict.

Strategy 2: Dealing with an Irate Client. Much like dealing with troubled employees, an angry client is anxious to fight against what he or she perceives to be a corrupt system. You must minimize conflict and resist striking back at the client, even if you are provoked. This strategy can actually be broken down into separate steps.

1. By maintaining a calm composure, you can defuse the conflict.

2. Now that you have the attentions of the client, listen closely to what they have to say.

3. Empathize with them and show that you care about their perspective.

4. Refrain from mentioning a “policy” if possible and instead explain why you cannot give them what they want, if you can’t. For instance, if they are asking for a refund, first explain why it’s not cost-feasible from your perspective.

5. After explaining your official stance, then try and find a compromise to keep them happy.

6. Last but not least, write down their complaint and consider whether your system needs modification in order to cut down on client dissatisfaction.

Dealing with Difficult Situations

It’s harder to make bad publicity go away. You can’t exactly dismiss an unfavorable review from your “organization”, nor can you order a public scandal to be kept quiet. When dealing with a difficult situation, try and remember some basic communication tips. Be honest in all things. Saying “I don’t know” is being honest when you don’t know. A few people might respect your honesty, but the majority of people aren’t probably used to someone telling the truth, sadly as that may seem. In many situations, when you tell the truth, people will respond more positively than you may think. Apologizing and listening are powerful characteristics.

If you don’t know the answer to something, you could use the honest approach and promise the person or people that you will return with the answer. You could defer a difficult topic to an expert rather than risk commenting on your own. You could answer a question with another question, or even give a parallel answer on what you do know, which satisfies the asker’s curiosity but avoids strong commitment.

If you would like more knowledge on how to cope with difficult situations, problematic people and other work-related problems, then order Accountability Coaching’s training course. This educational course will teach you everything you need to be successful in life and to avoid problems along the way.

Another solution might be if you have difficult clients or prospects is to choose not to work with them; therefore, never needing to learn how to deal with these kind of people. Think about this for a minute. You probably don’t have difficult friends – if people you know are difficult, they probably aren’t your friends or aren’t your friends for long. How much better would your life be without people in it who are difficult?

Brian Tracy talks about the first time you think about firing someone, you should. How much better would it be to shorten the time to try and deal with someone who is difficult and make the situation better, when it may never be? What else could you do with your time that would be a better use of it than to deal with difficult people?

How much better would your life be if there were no difficult people or very few difficult people in it? How would you feel? Consider what would have to happen to create this in your life, if you like the idea. No more negative emotions when that ‘difficult’ person calls or comes by the office for an appointment. No more complaining employees when they have to deal with a ‘difficult’ person. No more taking on people like this who later you wish you never did. I’m starting to feel better just thinking about no more ‘difficult’ people in my life any more, are you?

As a company grows and matures, other factors in its successful management and growth become important. I will analyze a company’s Growth Stages and identify common issues, success factors and problems for each particular stage; identify Management Considerations and Challenges as the company grows and matures; and consider Future Planning Requirements. As a Company grows and matures, it is important the organization understands how to plan effectively for new challenges, issues, markets and problems.

Small Business Growth Stages

- Basic Existence Stage

- Main Issues and Characteristics

1. Obtaining Customers
2. Delivering the product and service
3. Viable Services
4. Expand from key customers to broader sales base
5. Have enough Cash on Hand to cover Cash Flow demands
6. Owner performs all Management functions
7. Often a lack of Planning & Systems
8. Business just trying to remain viable
9. Have yet to stabilize production or product quality
10. Trying to gain sufficient customer acceptance
11. Business has strong demand on the Owner’s time, cash and energy

- Survival Mode Stage

- Main Issues and Characteristics

1. Business demonstrates viability as business entity
2. Satisfies a base of customers
3. Focus shifts from existence to managing Cash Flow
4. Generate enough Cash Flow to break even, stay in business and finance growth
5. Focus on Market Niche exploitation
6. Simple organization and the owner begins to delegate to a manger. However, strong direction and control still rests with the Owner.
7. Planning concentrates on Cash Flow Forecasting
8. Systems development & implementation in early stages.

- Obtaining Success Stage

- Main Issues and Characteristics

1. Exploits its Market Niche
2. Obtain Strategic goals
3. Expansions is important but stability, control and profitability are key as well
4. Owner’s Options:
a. Expand and Grow the business
b. Maintain Stability as a means of support to the owner
c. Owner considers disengagement from the business
5. Market penetration
6. Competitive Edge
7. Functional Management & Owner Delegation
8. Management & Key Employee Competence
9. Generating sufficient Cash Flow
10. Planning for rough patches
11. Professional Staff: i.e. Controller, CFO, CEO
12. Production/ Service, Marketing, Strategic and Financial Systems established
13. Operational Budget Management
14. Growth Strategy Options
a. Consolidate Company, develop efficiencies and marshal resources
b. Use Retained Earnings and Cash Flow, leveraged with Finance, to grow the Company
c. Cash Flow Management & Profitability are key concerns to finance growth goals
d. Develop Key people and management
e. Strong Operational and Strategic Planning
f. Growth requires the owner’s deep involvement (verses disengagement)

- Rapid Growth Stage

- Main Issues and Characteristics

1. Committed to a Growth Strategy
2. Concerned with adequately financing the growth stage
3. Need good ownership delegation to improve managerial effectiveness.
4. Enterprise develops complexity. Performance Control Systems are important
5. Established Expense and Budget Controls to maintain strong Cash Flow.
6. Profitability Planning Systems are critically important
7. Effective Financial Planning, Forecasting, Modeling and Strategy
8. Very skilled, experienced and competent Management Structure
9. Company systems are tested, adapted and highly delegated, but there is strong Strategic Leadership from Top Management
10. Capacity to become a big business
11. Strong Potential for Business Sale Premium
12. Effective Delegation and reliance on talented Managers & Key Employees are keys to success
13. Founding Entrepreneur(s) can opt out of business and have a more advisory role

- Maturity Stage

- Main Interests and Characteristics

1. Consolidate and Control profits
2. Retain advantage of relative small size, nimbleness and flexibility
3. Quick market change response time
4. Still retains the entrepreneurial spirit
5. Growth causes inefficiencies so must ensure the Management Structure continues to grow and evolve. Strong Managerial Talent
6. Strong Budget, Operational and Strategic Planning capability and focus
7. MBO System (Management by Objectives)
8. Cost Systems
9. Extensive & well developed company systems and Management Structure
10. Strong Financial Resources
11. Convert Entrepreneurial spirit to a Formidable Market Force
12. Strong Market Niches and Competitive Edge
13. Exceptional Risk Management
14. Profitability boosted by successful Innovation
15. Strength in Market Branding and Recognition
16. Maintain Competitive Edge by anticipating Market changes and adapting better and faster than competitors

Management Considerations and Challenges

- Key Management Factors and Areas: The following are areas which change in importance as a company develops and grows, which often determines the success or failure of the enterprise:

1. Financial Strategy: Cash Flow and Finance
2. Personnel Planning: Amount, Depth, Structure and Quality of Key People and Management
3. System Integration: Product Development, Production Management, Cost Controls, Budgeting Systems, Marketing Systems, Quality Management, Customer Relations, Strategic Planning, Cash Flow Management, Profitability Analysis, Asset Management, and so forth.
4. Business Resources: Customer Service, Market Share, Market Growth, Market Penetration, Market Trends, Supplier Relations, Manufacturing Processes, Facility Efficiencies & Expansions, Distribution Systems, Sales Management, Innovation, Technology, Industry & Market Positioning and Business Reputation.
5. Company Goals and Objectives
6. Operational Planning and Abilities
7. Supply Chain Management
8. Owners Willingness and Ability to Delegate
9. Strategic Long-Term Outlook and Management

- The Role of Business Planning: A good Business Planning Structure will look at the mentioned factors (among others) and effectively plan, develop, install and implement systems and processes to manage and anticipate these challenges throughout the business enterprise. A company can grow, or for that matter, collapse, so quickly that it is very important to have Planning and Control Systems in place to manage all the numerous variables which a business encounters and considers. Therefore, as the business grows and changes, and as the markets and competitors change, the small business has established systems and resources in place to successfully handle and manage these changing forces and factors.

Future Planning

- Growth Considerations

1. Does the business have the quality and diversity of experience and talent needed to effectively manage a growing company?
2. Does the business have systems in place and in development to effectively handle the needs and demands of an expanding, diversifying enterprise?
3. Do the entrepreneur/ owner/ founder(s) have the foresight, inclination and ability to delegate decision making to management?
4. Does the business have the Cash and Finance structure, along with an understanding of the Risk Factors, to aggressively pursue rapid growth?

Application

In managing a growing, expanding and maturing Small Business, we presented a model by which to evaluate and plan for the current business situation and future concerns and challenges. By understanding the particular Growth Stage Characteristics and Issues, Management Considerations and Challenges, as well as, Future Growth Planning Considerations, a business can apply this planning format and model to anticipate problems and successfully sustain growth. This model should be an integral part of a Company’s Business Planning, Market Planning, Product Development Planning, Strategic Planning, Sales Planning and Financial Planning and Forecasting.

Conclusion

An imbalance of management factors and challenges can create serious problems for the entrepreneur and his/her growing enterprise. We illustrated how the problems faced and the respective skills necessary to effectively deal with challenges change and evolve as a company grows, expands, and seeks success. Therefore, it is vitally important for business owners to anticipate and strategically manage these factors as they become influential and important to the enterprise.

As I explained in this article on Small Business Growth Management Strategies, a company’s stage of development determines the managerial factors which are necessary and important. A Company’s Planning Structure is vitally crucial in determining which factors and issues must be faced and dealt with. Knowing its keys to success, development stage model and future planning needs, a company’s managers, entrepreneur, founders, executives, investors, advisors and consultants can make much more informed strategic decisions and plan for future challenges.

The Case for a Business Consultant

When an entrepreneur is starting and growing a company, it becomes vitally important from the outset to seek and obtain objective advice from experts. The Company Principals need expert advisors on their team to discuss decisions and obtain objective advice; challenge the founders’ venture needs appraisal; provide an honest appraisal of strengths and weaknesses; review decision making processes; identify survival tactics and needs; develop and implement a business plan, marketing plan, strategic plan, sales plan, and financial strategy; build market focus and niches; anticipate market trends; establish and sustain competitive edge; provide financial foresight and planning; focus on cost controls, budgeting procedures, cash flow management and maximizing profitability; along with obtaining the appropriate Financial Resources to augment self-investment and achieve growth goals and opportunities. In short, a Business Consultant, with an experienced track record, can fill this long requirement list, helping the entrepreneur and his or her advisory and management teams to successfully start, structure, plan, expand and profitably grow the enterprise.

An organization structure is the way inwhich the tasks and subtasks required to implement a strategy are arranged. The diagrammatical representation of structure could be an organization chart but a chart shows only the ‘skeleton’. The ‘flesh and blood’ that brings to life an organization is the several mechanisms that support the structure. All these cannot be depicted on a chart. But a strategist has to grapple with the complexities of creating the structure, making it work, redesigning when required, and implementing changes that will keep the structure relevant to the needs of the strategies that have to be implemented. Successful strategy formulation does not guarantee successful strategy implementation. Varies among different types & sizes of organizations Organization Structure Organizational structure & the controls that are a part of it affect firm’s performance. When the firm’s strategy is not matched with the most appropriate structure & controls, performance declines. Specifies the firm’s formal reporting relationships, procedures, controls & authority, and decision-making process. Influences how managers work & the decisions resulting from that work. Specifies the work to be done & how to do it given the firm’s strategy or strategies. Provides the stability a firm needs to successfully implement its strategies & maintain it’s competitive advantages.

Structural Stability: Provides the capacity the firm requires to consistently and Predictably manage its daily work routines. Structural Flexibility: Provides the opportunity to explore competitive possibilities & allocate resources to activities that will shape the competitive advantages of the firm that it will need to be successful in the future.

Structure & Strategy
o Structure dictates how objectives & policies will be established.
o Structure dictates how resources will be allocated.
Matching Structure w/ Strategy Changes in strategy = Changes in structure Basic Forms of Structure

Mainly categorized in five types:
1. Entrepreneurial Structure
2. Functional Structure
3. Divisional Structure
4. Strategic Business Unit Structure (SBU)
5. Matrix Structure

1. Entrepreneurial Structure

The most elementary form of structure and is appropriate for an organization that is owned and managed by one person. A small-scale industrial unit, a small proprietary concern, or a mini-service outlet may exhibit the characteristics of organizations, which are based on an entrepreneurial structure.

Advantages of Entrepreneurial Structure
o Quick decision-making, as power is centralized.
o Timely response to environmental changes

Disadvantages of Entrepreneurial Structure
o Excessive reliance on the owner-manager and so proves to be demanding for the owner-manager
o May divert the attention of owner-manager to day-to-day operational matters and ignore strategic decision
o Increasingly inadequate for future requirements if volume of business expands

2. Functional Structure

As the volume of business expands, the entrepreneurial structure outlives its usefulness. The need arises for specialized skills and delegation of authority to managers who can look after different functional areas. The functional structure seeks to distribute decision-making and operational authority along functional lines. Most widely used as simple and least expensive.

Advantages of functional structure

o Efficient distribution of work through specialization.

o Delegation of day-to-day operational functions

o Providing time for the top management to focus on strategic decisions

Disadvantages of functional structure

o Creates difficulty in coordination among different functional areas

o Creates specialists, which results in narrow specialization, often at the cost of the overall benefit of the organization

o Leads to functional, and line and staff conflicts

o Minimizes career development opportunities

o Poor delegation of authority, inadequate planning for products and markets

3. Divisional Structure

The structural needs of expansion and growth are satisfied by the functional structure but only up to a limit. There comes a time in the life of organizations when growth and increasing complexity in term of geographic expansion, market segmentation and diversification make the functional structure in adequate. Second most common type of structure can be organized by:

- Geographic area

- Product or service

- Customer

- Process

o Advantages

- Clear accountability

- Higher employee morale

- Creates career development opportunities for managers

- Allows local control of situations

- Leads to a competitive climate within an organization

- Allows new businesses and products to be added easily

o Disadvantages

- Can be costly to set up

- Each division requires functional specialists

- Duplication of staff services, facilities, and personnel

- Managers must be well qualified

- Requires an elaborate, headquarters-driven control system

- Competition between divisions may become so intense that it is dysfunctional

4. The Strategic Business Unit (SBU)

Any part of a business organization, which is treated separately for strategic management purposes. When organizations face difficulty in managing divisional operations due to an increasing diversity, size, and number of divisions, it becomes difficult for the top management to exercise strategic control. Here, the concept of an SBU is helpful in creating an SBU-organizational structure. In multidivisional organizations, an SBU structure can greatly facilitate strategy-implementation efforts.

Advantages of Strategic Business Unit (SBU)

Establishes coordination between divisions having common strategic interests.

Facilitates strategic management and control of large, diverse organizations.

Fixes accountability at the level of distinct business units.

Disadvantages of Strategic Business Unit (SBU)

There are too many different SBUs to handle effectively in a large, diverse organisation.

Difficulty in assigning responsibility and defining autonomy for SBU heads.

Addition of another layer of management between corporate and divisional management.

5. The Matrix Structure

Most complex of all designs – requires both vertical and horizontal flows of authority and communication. In large organization, there is often a need to work on major products or project each of which is strategically significant.

Advantages of The Matrix Structure

- Project objectives are clear

- Many channels of communication

- Workers can see visible results of their work

- Shutting down a project can be accomplished relatively easily

- Facilitates the use of specialized personnel, equipment, and facilities

Disadvantages of The Matrix Structure

- Can result in higher overhead

- Dual lines of budget authority

- Dual sources of reward and punishment

- Shared authority

- Dual reporting channels

- Need for an extensive and effective communication system

All the structure has their own advantages and disadvantages.

It is task of strategists to choose the type of structure that would suite their strategies best.

We usually conceive of organization structure as a chart consisting of boxes in which the names of position or designations of personnel (and sometimes the name of the person occupying the position) are written in a hierarchical order along with the depiction of the relationship that exists between various positions. To a strategist, an organization structure is not only a chart but much more.

Are you an entrepreneur? If you are, then I believe you will familiar with the pattern or business challenges faced when starting and building a business from scratch. If you are not an entrepreneur but you dream of becoming one someday, then I think you will find this article worthwhile.

Why am I writing on such a topic? I decided to write on the “10 business challenges every entrepreneur must face when building a business from scratch” to give entrepreneurs a glimpse of what to expect when they set out to start a new business venture. I am not writing to show my writing skills. Moreover, I am not a professional writer; I am an entrepreneur and investor to the core. I simply write to share my knowledge on building a business with anyone who is willing to learn.

This article is not meant to discourage or scare you from going into business. Instead, I wrote this article to prepare and highlight you on the business challenges to expect and how to handle them. Just as the popular saying goes:

“He that is prepared has half won the battle.”

Below are 10 Business Challenges Every Entrepreneur Must Face When Building a Business from Scratch:

1. Developing the Vision and Idea:

This is usually the first challenge faced by every entrepreneur. Finding the right business opportunity or creatively developing an idea is certainly not an easy task. I call “Envisioning the idea” the first true task of an entrepreneur. As an entrepreneur, you must develop the ability to see what others cannot see. While others see problems, you must see opportunities.

But seeing opportunities is just the first task. The main challenge is going to be your ability to forge that opportunity into a business idea. I see this as a business challenge because the process of transforming opportunities into business plans is like trying to turn lead into gold. I call it the process of “Creating Value out Of Nothing.” If you are not an entrepreneur, you might not be familiar with the process. The process of:

- Identifying a problem
- Seeing an opportunity in the problem
- Coming up with a solution
- Developing your opportunity into a business idea
- Integrating your solution into the business plan

Another way “developing the vision and idea” will be a business challenge is that an entrepreneur must sometimes assume the role of a sorcerer. Let me explain in detail. While others dwell in the past and present, an entrepreneur must envision and forecast the future. An entrepreneur must always be ahead of his time or else he might lose his relevance. He must have the ability to bring into present what is yet to be. Let me give you some practical illustrations:

In the late 70s and early 80s, while IBM saw increase in demand for their mainframe computers, Steve Jobs envisioned a personal computer in every home and Bill Gates envisioned the need for easy to use software for personal computers.

While everyone saw humans flying as an impossibility, the Wright brothers envisioned a flying machine.

Back in those days when cars were custom made and exclusively for the rich, Henry Ford envisioned affordable cars for the masses.

I believe with these few examples, my point is clear. Developing the vision and idea is the first true task of an entrepreneur.

2. Raising Capital:

After developing your idea, the next challenge you are going to face is the challenge of raising capital. As an entrepreneur, you are the only one who knows the idea to the core. You are the only one who knows the story of the future. Trying to convince investors about something that doesn’t exist is definitely a challenge.

There is more to raising capital than just simply asking for money. Most investors want to invest in already established businesses with minimal risk. When building a business from scratch, raising capital will definitely be a business challenge you must face.

To overcome this challenge, you must develop the ability to sell your idea and vision to potential investors. When I say “sell your ideas”, I mean improving your communication skill and your manner of presentation. In the game of raising capital, you must have a good story backed by a strong business plan. If you are interested in learning how to successfully raise capital, you can check other articles I have written.

3. Assembling a Team:

The third challenge you must face in the course of developing a business is assembling the right team. When I talk about a team, I am not talking about regular employees. I am talking about a “round table strategic business team” that will meet regularly to brainstorm on ways to grow your business.

As an entrepreneur, you are bound to have strengths and weaknesses. That is the more reason you need to assemble a strong team that will cover up for your weaknesses. A team is a necessity in your quest to build a business. Now finding a business team is just the first hurdle, transferring your passion and vision to your team is the real piece of cake.

You must strive to make sure your team sees the future you see. They must believe in your possibilities and must also be passionate about making that possibility a reality. If they can’t grasp your vision, if they can’t see they future with you, then they are not worthy being your team.

Your strategic business team should comprise your banker, financial advisor, accountant, attorney or legal adviser and any other specialist that will be of tremendous impact to your business. A question on your mind might be “how am I going to pay this team? My answer is I don’t know. You will have to figure it out yourself or better still, you can consider bringing them on board as partners.