The title ‘small business’ may not necessarily mean that owners face little challenges. In fact, small businesses sometimes face bigger problems than the larger companies especially when the small business runs duties for large corporations with a small work force or the required experts. However, such problems cannot stop the number one employers and the biggest contributors to the world economy from running. As a small business owner, you do not have to spend most of your time and energy trying to prevent small problems as well as major catastrophes. All you need is to understand the top challenges that small businesses face and set up systems and processes that will help you to avert these problems before they occur. By doing so, you will use your time and energy working on strategies for running your business profitably and growing it. Here are the top challenges and how to overcome them.
The number one challenge for both small and large businesses is cash flow management. The company needs money all the time to keep running, and sometimes you may run out of cash to pay outstanding bills and outgoings that cannot wait. You may also have problems with some clients who take too long to respond to invoices. Besides, you may want to implement changes in your business like increasing your workspace or diversifying, and you do not have the money to kick off these projects.
Solutions: To avoid money mishaps, keep accurate accounts of all the outgoings and all that comes into the business. You need to accurately enter into your account the refunds, orders, payroll, pre-orders, loans, marketing budget, payments, software subscription, supply costs and all the other money related things. The good thing is that you do not have to spend a lot on hiring accountants to do the job, you can make use of the many readily available online accounting programs to manage the finances of your small business. The most important thing to do is identify the most suitable program for your business by checking them online or seeking the opinion of an accounting expert.
For the clients who need constant reminders to respond to invoices, you can use online invoices and invoice reminders that persuade indisposed clients to part with money. You can get software such as Hiveage to help you with free invoicing.
When you need money to implement changes in your business, consider crowd funding to get the required money. These are also several crowd funding websites such as Lending Club and Kickstarter where you can borrow money at lower costs than traditional banks.
Money constraints and the desire for perfection can tempt you to try and do everything by yourself. Tiredness is a big challenge that many small business owners brush aside but which can lower the quality of service and products of your company. When tired, you are likely to become forgetful, pay less attention to clients as required, get disorganized and make mistakes.
Solution: Delegate duties that do not require your expertise. Such tasks include emailing, responding to calls, receiving visitors and booking conference or meeting rooms. The modern serviced office spaces and virtual offices come with the reception services. Therefore, all you need to do is to rent a serviced office or choose virtual office plans that give the services. That way you will concentrate on the tasks that need your expertise while at the same time have the other important duties done for you.
Hiring people on a part time basis can also help solve the problem of tiredness. Assuming you have other important tasks to accomplish and the payroll has to be prepared, you can outsource the services of an expert to make the payroll for you.
Keeping employees engaged and happy is not an easy task unless you identify and understand their needs.
Solutions: Cultivate a relaxed atmosphere where employees feel free to talk to the management. The best way of creating a relaxed atmosphere for the modern worker is to use co-working office spaces. The co-working space provides employees with a collaborative and open environment that enhances the connection between employees as well as communication with the management. Such connections increases employee motivation and improve worker productivity. You should also seek feedback from employees on their needs. For instance, if you learn from the feedback that most of your female employees wish to work from home because they have little children, you can grant that as a way of keeping them focused on their job. Another way could be to let employees work from any location within the office or outside the office that is most convenient for them and which makes them highly productive.
Finding and keeping customers is crucial for the survival and growth of your business. As an entrepreneur, you need to establish a unique selling point for your products or services and market it clearly to your potential customers.
Solutions: Conduct market research to determine which aspects of services or products highly interest them and customize your products and services to suit those interest. It is important to consider the cost of customization against the desired profits so that you do not run into losses in the name of meeting customer needs. Another effective way of knowing your customer’s interests is by asking for feedback from loyal customers. Feedback from your loyal and best customers will enable you to develop marketing strategies that attract new customers as well as retain the ones you already have.
You could also ensure that your business is located in a place that your clients can easily reach. To achieve that, all you need to do is to rent an office in a smart building close to other related and unrelated businesses, that will increase the number of people who get to know about your business.
Challenge V: Gaining and Maintaining the Competitive Advantage
When you start a small business, your primary focus is on how to establish yourself in the market. However, many small business owners do that by working around keeping the company up instead of analyzing their competition and finding ways of rising above them.
Solution: Find time to carry out competitive analysis so that you get clear on what your competitors are doing, their methods of accomplishing tasks and goals and the number of customers who leave you for them. A competitive analysis will enable you to develop strategies that will keep you on the top of the market. The process of conducting competitive analysis involves knowing your top ten competitors, what they sell, their strengths and weaknesses, the media they use to market products and services the challenges they pose to your business and how you can counter the challenges.
The world of business is as dynamic as the technology which is an important part of running businesses today. You may be too preoccupied with the day-to-day running of your business to the extent that you miss out on the emerging trends in the industry as well as other general new fields that may impact the way you do business.
Solutions: Include in your weekly activity schedule time for social media exploration plus the search for other information relevant to your business. For example, you could use a twitter account to keep up with trends or read blogs and news articles relating to small businesses. Furthermore, you can consider attending relevant exhibitions and conferences where you are likely to enlarge your business networks and in return gain new customers. You can also subscribe to newsletters with current information on new trends and sustainability of small businesses.
When your expenditures are too many, it means a big chunk of what you earn goes into meeting those expenses. That is not healthy for a small business that intends to keep running and remain profitable.
Solutions: Focus only on what your customers want. Remove unnecessary projects such as creating products that clients are not interested in or will never use. You could also consider cutting down on some of the monthly expenditures like office rent and salaries. For example, you can reduce the amount of money you pay for rent by working from home, renting a virtual office or sharing a work space with other companies.