According to Forbes, around 90% of all startups will eventually fail due to a variety of reasons. Funding issues, poor traction on the market, inability to attract necessary talent and other factors are among the biggest reasons why most new businesses go belly up. If you run a business and have made it past your fifth year while growing your company’s headcount substantially, congratulations: you’ve reached a level that only one in ten young businesses has attained.

Treat yourself to a drink and buy your colleague’s dinner. Your accomplishment is worth celebrating. However, it’s not the end of your long days and sleepless nights. As a matter of fact, you’re just getting started. If you’ve been in business for half a decade, there’s a good chance that you already fall under the small, and medium enterprise (SME) category. This means that you’ll be experiencing some serious growth soon if you haven’t already.

And while growth is always a good thing for any business, the experience isn’t all peaches and cream. As a matter of fact, many entrepreneurs argue that the growing pains associated with taking business from startup status to full-fledged SME is the hardest thing they’ve done.

Paying for a larger labor cause, taking on more risks, paying more taxes, and diversifying your cashflow sources are all tricky scenarios where a single misstep can inflict serious setbacks on a company’s development. Fortunately, many entrepreneurs have shared valuable insights on how they overcame the challenges associated with growing a small enterprise. Here are seven of the most cited elements that need to be present in your operations to help you avoid the pitfalls of critical growth stages:

1. A Good Accounting System

Cashflow is king in any business of any size, but SMEs, in particular, should take this adage to heart. While the company is in the phases where cash reserves are not plentiful, every peso needs to be accounted for in order to avoid bad financial decisions.

Therefore, having a dedicated person or team who looks after your finances is non-negotiable. This department’s primary responsibility is to oversee where cash is spent and to make sure expenditures are lower than net revenue. This team needs to be well-versed in accounting best practices and it needs to be equipped with the right kind of accounting software.

2. An Effective Marketing Strategy

Essential to maintaining healthy cashflow is a company’s ability to generate qualified business leads. For that, a growing SME needs to have a savvy marketing department that can pinpoint the company’s target audience and expose them to compelling messaging so they can graduate into prospective customers.

Marketing is a broad discipline that encompasses both legacy and online media channels. Whether you want to invest in TV ads and billboards, or you’d rather focus your resources on SEO and social media marketing, you need the right kind of people in your marketing team to drive the efforts.

3. An Emergency Funding Source

Staying on the subject of cashflow, it’s almost impossible to maintain a clean bill of financial health during the course of your growth years. Most SMEs will inevitably hit a rough patch when the funds in hand are less than what’s needed for an important purpose. Therefore, it’s always a good move to identify a possible funding source if you ever run into a financial emergency.

Emergency funding sources could include a credit line with a bank, investors who are willing to bail the SME out, or even financial institutions that provide short-term loans under ethical conditions. For instance, lenders like First Circle offer B2B SMEs financing services of up to 10 million pesos under their Purchase Order Financing and Invoice Financing programs.

4. A Reliable Hiring Mechanism

As mentioned earlier, many SMEs fail due to the chronic inability to find and recruit people who have the skills necessary for the company’s sustained growth. While you can build a perfectly functional startup with just your friends and colleagues, recruiting for an SME is a whole different ballgame.

Recruiting for SMEs requires hiring at greater volume and with greater precision. A good hire can tangibly move your enterprise forward almost from the day he or she starts, while a bad hire can set you back for several months or years.

For best results, make sure your HR department has the bandwidth and the systems necessary for finding potentially good recruits. Having a well-built Facebook or Linkedin page that posts job ads is a start. Using professional-grade tools or hiring a head-hunter agency is even better if you can afford it.

5. Firm HR Policies

As your company grows, the diversity of the personnel also expands. While your SME may have started with like-minded people, the second, third, and fourth generations of employees will likely attract people who bring different cultures, values, habits, and preferences to the mix. While diversity is a good thing, cherishing it doesn’t necessarily mean that you should allow it to dictate the direction of company culture.

You can maintain the workforce’s alignment to your original vision by enforcing humane yet unwavering human resource policies. This ensures that a general code of conduct will be followed while molding your workforce using a singular vision.

6. A Streamlined Training Program

Professional development is among the most cherished values of every employee worth keeping. Therefore, making sure that you have a formal training program is a must as your SME grows. This includes in-house training on processes, provisions for seminars, and attendance in industry conferences.

7. A Forward-Thinking BizDev Team

As your SME stabilizes and more people find out about it, more opportunities will constantly come your way. While business opportunities are almost always good to have, it’s also a fact that more companies fail due to an over-abundance of opportunities than the lack of it.

This is where your business development (BizDev) team comes in. These people are in charge of analyzing every opportunity and whether or not it warrants serious consideration. For the most part, the primary factors are the opportunity’s potential rewards, its associated risks, its affinity to what your SME is good at, and whether it fits into the bigger picture of the company’s direction.

There are the seven most important resources that an SME needs to have as it undergoes its critical growth years. Is your company equipped with all of them? Did we miss anything? Let us know.