Owning and operating a small business can be a daunting task. Especially when you consider the myriad challenges that other SME owners have encountered along their own paths.
Brainstorming business ideas is just the beginning. You need to start and successfully manage your small business in a way that generates revenues and keeps your loyal customers returning, too. The first two years of your business’s operations are the most critical. It’s during this time period that a large percentage of startups and small businesses fail.
Those who are ambitious enough to proceed regardless of this will need to manage everything – administration, accounts, customer support, marketing, teams of employees. And of course, lead generation strategies as well!
These are the most common challenges that small businesses face, and how you can overcome them and lead your enterprise to lasting success.
1) CASH FLOW CHALLENGES
There are very few entrepreneurs who haven’t dealt with money issues at some point or another. Any business will have plenty of transactions taking place at any given time. You will need to balance these carefully to maintain a strong cash flow.
You can do so by tracking every transaction your business completes and keeping a simple yet strict financial forecast at hand. If your company doesn’t yet have the budget for a dedicated accountant, a business owner or manager can take on this type of accounting.
There are other solutions to cash flow issues, some technological and others more pragmatic. There are dozens of software programs designed to assist small business owners in tracking payments, generating invoices, and managing their cash flow. This software can alert you when payments are due, file your VAT and tax information, and automatically update your bank statements.
You can request faster invoice payments from your customers and ask your trusted vendors to extend your payment deadlines. You will need a strategy to overcome cash flow issues, but it’s certainly achievable.
2) STIFLING OVERHEAD COSTS
So many small businesses fail because of high overhead costs and low revenue streams. You can mitigate this risk by using existing customer research to determine which services and products your customers need and which they don’t. Then, cut down on your expenses accordingly.
In addition to refining and streamlining your product inventory, you can reduce overhead costs of office supplies, cut back on general utilities and any other in-house expenses. If you allow staff to work remotely you can save on physical office space costs too.
3) ATTRACTING AND RETAINING CUSTOMERS
Attracting customers is simple enough if you know your product well and provide excellent customer service at every level. However, to achieve this you must do market research. Identify your target market, find out their pain points, and develop a strategy to address these pain points directly.
Marketing will play a significant role in your ability to attract and retain customers. You should market your business across a variety of popular digital media platforms. Plus, you must maintain a regular and meaningful presence on those platforms so that you can reply quickly to customer queries. Your digital marketing strategy should be personalized. Avoid using robotic, automatic responses when dealing with customers and personalize your emails when you can.
One of the best ways to attract new customers is to ask your current customers to recommend you to their friends, colleagues, and peers. There are few better marketing methods than word-of-mouth referrals from happy clients!
It’s worth considering the quality and prices of your services when creating a customer retention strategy. Loyal customers are more likely to offer ongoing patronage to companies that have both reliable services and excellent prices.
Ask your existing customers for feedback about your services and pricing models. Use their recommendations to give them what they want in a way that preserves your profit margins too.
4) LEANING TOO HEAVILY ON HIGH-PAYING CUSTOMERS
High-paying, large-scale customers are always great for business. But leaning too heavily on a select few customers can become problematic. It can be tricky to shift your focus away from these valuable customers and find new ones that may not be as reliable or as profitable. However, it’s important to do as a small business owner.
Imagine that one big client informing you one day that they no longer need your products or services. If you have relied too heavily on them, you may find your business in a financial conundrum quickly. This is why you need to cultivate a group of smaller clients to keep your company afloat should your big-ticket customers ever move on.
5) MAINTAINING QUALITY SERVICE AS YOU GO
Most small businesses find themselves growing rapidly at some point. This is always a positive thing, but rapid growth can make it tricky for you to focus your full attention on each customer individually. Unfortunately, the quality of your service may decrease as a result.
The most obvious solution to this issue is to outsource some of your business’s workload or to hire more staff. You can certainly do so without losing your characteristic personal touch by carefully choosing candidates for every open position in your company and training them well.
Share your goals, vision, and technological knowledge with them to help them understand exactly what you want to achieve. Once they’re on board, they will give your customers the same level of attention that you did. This enables your business to grow and scale freely without losing clients.
6) MOTIVATING YOUR STAFF
A small business cannot compete without a team of passionate, knowledgeable, and attentive employees on its side. Naturally, you can incentivize your staff with a healthy paycheck to a point. But their ability to perform well actually begins with the level of leadership you provide and the workplace culture you establish.
It’s important to communicate openly and respectfully with your employees and to remain approachable at all times. Your staff should always feel able to speak to your company’s management team should they need to.
Meaningful feedback is vital. You need to understand your employees’ needs, goals, and challenges to motivate them and provide a workplace in which they can be consistently productive and engaged. Ask them for regular feedback about your methods and approaches, and take their responses on board.
7) DEALING WITH BURNOUT
Small business owners have a lot on their plates. You are probably doing the bulk of your business’s workload yourself and are filling many roles. This level of dedication can quickly lead to stress, exhaustion, and burnout.
You can avoid entrepreneurial burnout by automating processes wherever possible, delegating certain tasks, and perhaps even hiring some assistance, part or full time. Let your new employees help you with simple but time-consuming tasks that take up your valuable time. Free yourself up to focus on the more important aspects of your business.
Be sure to clearly and concisely explain tasks when delegating them. Clear communication minimizes the chances of confusing your staff and will help to prevent avoidable errors.
8) STAYING AHEAD OF THE GAME
Every business needs to stay up to date with the latest trends and advancements in their sector to remain viable. This is the only way to stay competitive, and it starts with you as a business owner.
Set aside some time to read up on new advancements and product releases, and on social media trends, marketing, and other relevant areas. You can keep up with new trends by networking with other industry members, attending exhibitions and conferences, and curating your RSS feed to reflect relevant news for your industry.
Investing in yourself and furthering your education is another way to improve your chances of success. Many business owners neglect their own learning and lose out on the opportunities to improve their communication, organization, leadership, and problem-solving skills. All of which help in overcoming day-to-day challenges in a small business.
Small business owners face plenty of challenges daily. However, none of them are insurmountable.
Follow our advice to attract and retain customers, streamline your business’s cash flow, reduce overhead costs, and stay up to date with your industry to ensure that you can offer the best level of service possible.