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Did you know that one in 12 businesses closes every year?
In addition, only 33% of businesses remain in business for more than 10 years after its inception.
This is mainly due to the difficulties faced by small businesses in the early years. While some businesses take these opportunities as an opportunity to improve and learn, others are fading.
That is, here are five common challenges that most small businesses face and strategies to overcome them.
1. Capital and cash flow restrictions
Every business – small or large – needs start-up capital and working capital to operate permanently.
According to the survey, 23% of the 2,400 small business owners said that lack of capital and cash flow is the number one challenge.
Clearly, capital shortages and cash flow constraints are a major problem for any small business. Not only does it impede growth and innovation, but it also negatively affects the efficiency and quality of day-to-day operations.
Solution:
- Small business loan; Many banks and financial institutions provide financial support to small businesses. However, approval depends on your interest and ability to repay the loan.
- For small business grants; Unlike loans, business gifts are an interest-free option to support your small business. Many public and private businesses, as well as governments, provide such financial support to help small businesses recover.
- Money collected Another way to grow your business is to raise money online. You can use platforms like Kickstarter or Indiegogo to raise money online.
- Venture Capital Funding; Look for individual investors or venture capital companies who want to invest in your business outside of fair trading or stocks.
- Family and friends; If none of the above works, you might consider borrowing from your family and friends to keep your business afloat.
In addition, loans, donations, population, venture capital, etc. To increase your chances of making money, make sure you have a business plan to get predictions when you decide.
2. Build a customer base
Unless you have a reputable brand in your area, you should go out there and look for customers. In fact, the most successful and well-known companies need to constantly build and expand their customer base.
Still, let’s face it. This test is very useful for small businesses because
- You are still not a family name, so customers may not know your brand well.
- Customer Acquisition Cost (CAC) has increased by 55% over the past five years.
- Limited financial resources do not allow you to spend enough money on marketing and advertising.
The above factors make it harder for small businesses to find customers.
Solution:
- Get to know your audience Before attracting customers, you need to know them well (just like that!). Creating a buyer is a good place to start knowing the likes, dislikes, goals, temptations, fears, etc. of the intended audience. Once you know these details, you are in a much better position to provide solutions with your products or services.
- Focus on retention Studies show that getting a new customer is five times more than keeping existing ones. So make sure you provide exceptional customer service and gain long-term loyalty.
- Use of social networks; Social media is a place where you can reach the top customers and get the most cost-effective way. So make sure you create fresh content, engage your audience and make sure your brand is on social media platforms.
3. Acquiring and retaining talent
Small businesses do not just struggle to find customers. They also have difficulty finding the right skills to work for them.
Again, your brand plays a role here. Successful brands are easy to attract and retain in the long run. In fact, 75% of job seekers prefer to apply to well-managed companies.
In addition to recruitment challenges, retaining qualified employees is another challenge for small businesses. According to the Work Institute’s staff retention and transfer report, about 43% of new employees quit their jobs in the first 90 days.
Solution:
- Invest in Employer Branding Manage your employer brand to attract and retain top talent in your industry, just as you created your brand to market to your customers.
- Provide attractive compensation, benefits and career development plans For your employees to stay longer.
- Participate Find ways to empower your employees and engage them in their personal career goals to better understand their needs. Accordingly, personalize their business plan, learning and development, etc.
4. Workflow management
The next step is to grow your small business.
With a growing customer base and team size, workflows are beginning to become more flexible in nature. In addition, a lack of systems and processes can make everyday activities unstable and chaotic.
Solution:
- Process documentation Detailed Process Document is the first step in managing your workflow management. Keep a record of all the details of the process and procedures so that all team members, including the new competitors, can easily line up.
- Invest in workflow automation tools.
- Audit your workflow processes and systems Regularly. Find the gaps and improve them accordingly.
5. Dependent on founder
Without well-defined processes and systems, most small businesses rely heavily on their founders.
Here’s a quick check-up:
If you have been away from your business for a while, will it still work as efficiently as it did in front of you?
In addition, some founders strive for autonomy for their team. You cannot simply hand over responsibilities and let the team take care of them.
Solution:
- Build a management team Build a team of key people in your organization. Choose those based on their needs, performance and knowledge of your industry.
- Learn the art of representation It is not possible to get the job done just by hiring the right staff. Learn how to delegate and empower your team to operate without your supervision.
- Replacement planning Almost all of the founders of the most successful companies are planning to replace themselves while doing their best. The goal is to develop future leaders as you continue to grow your business.
Final Thoughts
Now that we have identified some of the most common challenges that small businesses face, now is the time to review the challenges within your organization.
If you are experiencing any of the above challenges, try the solutions and see if they work for your business.
Also, do not hesitate to contact experts or consultants if you know you have been experiencing similar business problems for a long time.
About the author:
Hazel Raoult is a freelance marketing writer and works with PRmention. She has 6+ years of experience writing about business, entrepreneurship, marketing and SaaS. Hazel likes to divide her time between writing, editing, and spending time with her family.
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