8 Challenges Faced by Small Business and How to Solve Them
Owning and running a business is a frightening thought for most people, especially when you consider how many problems you might face along the way.
Having the idea is often the easy bit. Starting and managing it successfully along the way is the hardest and scariest part. The first two years of your business are crucial and most small companies do not make it. Those brave enough to do it have to manage every aspect from employees, marketing, admin, accounts and, perhaps most importantly, making sure they don't miss out on any leads!
AT HDO we are all about helping small businesses realise their potential by providing virtual assistants and receptionist services to help small business owners concentrate on what they do best. That is why we decided to list 8 of the most common challenges small businesses face and our advice on how to actually deal with them.
1. Cash Flow Issues
Money problems are often the ones that entrepreneurs are most afraid of, and for a good reason. There are a lot of incoming and outgoing transactions that you need to take care of in order to sustain your start up. At the same time you have to manage all of that whilst meeting deadlines.
The solution is to track every transaction, keeping a simple forecast and keeping it strict. Don't ignore it. That kind of bookkeeping can save your business. Hiring an accountant would be the best and an obvious option, but since you are just starting out, it is understandable that you probably cannot afford it. But do not worry, there are other solutions.
With the technology developing, there are a lot of software options for tracking payments, creating invoices, managing cash flow and so on. The software can warn you when a payment is due, update your bank statements and file your VAT. There are also some business strategies you can implement such as asking for a down payment, every time you receive an order. Also, it is always worth asking your customers for faster invoice payments. As for your vendors, try to have them extend your payment deadline. With the right strategy, you can overcome cash flow issues.
Visit links: Avoid Cash Flow Problems
2. Avoiding burnout
If you are a small business owner, you probably want to do everything by yourself. You knew your product or service, you can do it quicker and better than anyone else.
But that is probably going to cost you. Not your money, but your health and family relationships. Often, burnout and stress can make you quit everything completely, and you don’t really want that. In order to avoid this, it is best to learn to delegate your tasks, and maybe even hire some help, whether full time or for just an hour a day, it is your choice.
Let them help you with the simple things that take a lot of your time and let yourself focus on the more important parts of your business. Remember to clearly voice your tasks when delegating. Communication is the key to a successful working relationship. You don’t need to do everything and remember, you are not giving up control, you are just getting help.
3. Finding and retaining customers
As you probably already know, the key to finding customers is to have a product that is unique and that can satisfy their needs. So, do a little market research, find you target group, see what their pain points are and how you can resolves this for them.
Also, marketing plays a big part in your business. Choose a popular media platform to advertise your business and keep it simple. Make your statement brief but something that would stick in your customer’s mind, since mind positioning is half the job. You should also be available as much as possible, so that you can reply instantly or at least in the first few hours. Do not use automatic responses, make those e-mails personal and trust that they will know the difference. For special potential clients, where you think you can earn well, you can always offer a demo service just to give them a taste of what working with you would look like.
Don’t be shy and feel free to ask current customers to recommend you to others, because there is no better marketing than a happy customer. Their unique experience will be the best commercial.
A way to keep customers is to have a great service coupled with the best price. This sounds like a very obvious thing to say but keeping that value-for-money policy constantly on your mind will guide you. You can again do the research, but this time focus on the existing customers, ask them for feedback, see just how much you earn from them and how much is the service actually costing you. Focus on your best customers, learn from their example and you will profit more.
If you have a negative comment, get right on it. Call the customers personally, ask them specifics about what bothered them and offer compensation in a form of discounts, gifts, etc. It seems like a lot of trouble, but it is worth it. Negative comments will not lead to good word-of-mouth, which is something that can make or break a business.
Use the following link to create buyers persona templates to help your customer base grow: Create Your Own Persona Templates
4. Relying too much on one customer
It is understandable that even one good, large, paying-on-time customer is great news for a new business, but it can also be a problem. And that is the fact that it’s not making you a business owner as much as a contractor. It can be very difficult to stop focusing on that single customer and try to find new ones that might not be that reliable, but it is necessary.
All sorts of problems can occur, and even that one big client could stop having a need for your product. That is where you start needing other small clients to help you keep your business afloat if that big one stops paying.
Go to our segment on finding new customers and follow it through, because it can only help and secure your business and also, visit the link below where you can learn more on generating more clients.
Visit link: How To Generate More Clients
5. Growth v Quality
There will come a time when your business is growing and it is growing at a pace that is not allowing you to focus on every customer yourself. Hence, you will feel like the quality will start to decrease. And that is a moment when you need to make some key decision to hire or even to outsource help. Usually, it is that personal touch that made your business a success in the first place. But, do not worry, not everything is lost. It is a challenging decision, but it does not need to mean that the game is over. You can have both.
Choose the right candidates for every position in the company and pass on your knowledge freely. Share your vision and goals with them to help them understand what you want to achieve and pass on all the information you can to empower them. Once they understand, they can focus on the customers as much as you did, and also allow your business to grow.
But never forget, customer focus is the most important! Visit this link to learn more on scaling up your business: Scale Up Your Business
6. Motivating Employees
By now you are aware that good employees are needed for a successful business and they are not found easily. It is not that hard finding the answer to what motivates a good employee. You are thinking, it is either a good paycheck or some other form of incentive. But not many entrepreneurs understand that there is so much more to it. It starts with you, the boss.
Communication with employees should be open and in a decent manner and to be approachable is a must. Anyone working for you whether directly employed or outsourced should feel they can talk to the management. Also, simple little things such as coffee, sodas, cookies and fruit are cheap ways of making staff relaxed and thus, more productive and motivated to work.
Feedback is of a crucial importance. Understanding employee’s needs is a must. Many companies do not do that, and are unaware something is wrong, but later find themselves wondering why people are quitting.
7. Too many overheads
Having too many overheads and not being able to deal with them accordingly is what makes a lot of companies fail.
This is where a previous existing customer research really comes in handy. That way you already know what your customers really need and what is not necessary, thus cutting your expenses. You could cut the expenses on the packaging, making it simple but keeping the quality of the product that is probably more important to your customer.
These expenses could also be a new laptop in an office, a new printer, coffee machine, etc. You could lower the prices on some of the products that do not sell that well, but those discounts need to be well thought through, so that YOU benefit from them as well as the customer. For example, 5 percent off if they make the payment in advance which may also help your cash flow.
8. Staying up to date
In order to keep your business, you need to be on the same page with what is trending. That is the only way you can measure up with the competition. Also, this one is not that hard, and it would only take as much time as you want. Set aside time, whether it is one hour every day, week or more only you can know. But make sure you keep up with the trends. Read newspapers, blogs, Twitter, set up your Google Alert and you will manage to keep your business from falling behind.
Another way of being out there is through conferences, exhibitions, anywhere your target group is. Mingle, network and you will discover new things, learn about them and get noticed whilst you are at it.