9 Business Challenges Every Small Business Struggles With And How to Fix Them
Small companies come up against a lot of different challenges. Some are harder than others to overcome. About 20% of small businesses fail by the end of their first year, 60% fail in the first three years and by the end of 10 years 80% will have closed their doors permanently.
Many common business problems and challenges that make these businesses fail are actually fixable. Often all they needed to do was take a step back, breath, and take the time to understand the pain points the business was experiencing, and re-think their strategy.
Here are some of the challenges small companies face, along with solutions on how to fix them:
1. Finding Customers
2. Increasing Brand Awareness
3. Building an Email List
4. Lead Generation
5. Delighting Customers
6. Hiring Talented People
7. Managing Workflow
8. Financial Planning
10. Disaster Planning
1. Finding customers
All companies whether new or old face the problem of finding new customers.
When you aren't a household name, and you are just starting out, finding customers can be particularly difficult. Especially as there are so many channels now available, often a new business will use all of them which is exhausting and time consuming.
It is easier to find new customers if you know who they are. Think about how your target customer looks, what they do (job, hobbies), and where they spend time online.
The more specific you can be the more dramatic the improvements to your business results. Once you know who your customer is, you can start creating content and adverts to get in front of them in the places they like to spend their time.
2. Increasing brand awareness
It's easier to get people to buy from you if they know who you are.
Today's big brands haven't just come out of nowhere, they spent many years building their company name and getting their company values out to the masses. They all worked through failures and rejections to get to where they are.
Some of the best ways to start spreading brand awareness is with PR, co-marketing, and blogging.
PR: Public relations is about focusing your voice and finding your place in the market. Find journalists who cover your type of business and see if they would be interested in writing about your new product/service.
Co-marketing: Partnering with another brand will help you inherit some of their image and reputation and create brand evangelists outside your current circle. It's a fantastic way to gain a large volume of new contacts relatively overnight.
Blogging: Producing a high-quality blog will help you to build brand awareness. It also helps to drive traffic to your website where you have the opportunity to convert them into leads. It can be one of the best places to establish your authority in your industry and build trust among your potential customers.
3. Building an email list
In order to stay in contact with people interested in your products and to encourage them to buy that product you need to be able to stay in contact with them, and the easiest way to do that is via email.
Often a new business will settle for buying an email list thinking this is the quickest way to get to new customers. They also stick with an existing email list that hasn't been updated in years.
Instead of buying or renting an email list, build one yourself with an opt-in form on your website. An opt-in list is made up of subscribers who voluntarily give you their email address so you can legally send them emails.
To collect people's emails, you'll need to create forms on your website for each page. These forms only ask for an email address, this then helps you to keep potential customers informed about stock availability, or articles that may be of interest to them.
You'll need to create lots of great content that people will want to read for them to start trusting you enough to be willing to hand over their email.
Email lists should be checked at least once a year. Send out an email asking the customer to opt in again. That way you know you still have permission to stay in contact with them, and you can delete all the redundant non-responsive email addresses.
4. Lead generation
Generating leads that are both high quality and in high quantity is the most important part of setting up a new business. Most business owners will either get on the phone and start calling companies, have a team of people (telemarketing), or use an external telemarketing company to find leads.
How to fix it:
If you have a website you have a lead generating machine that will do all the work for you. First you will need to optimise your website for conversions, as your website is the most important tool you have for turning prospects into customers. Look through your website and ask yourself:
- Does each of your web pages clearly guide your visitors to take action?
- Does your content manager (CMS) collect all the information from your submission forms and sales info like DR Adepts' CMS does.
- Do you have custom landing pages for every single advert or other promotion you run?
- Do you have Call To Actions (CTAs) on every page telling people what to do (buy, contact, leave email address, submit)?
Prioritise the most popular pages (use software such as Google analytics for this information). Most websites best performing pages are the home page, contact us page and some blogs.
Make sure the best performing pages have CTA's, forms, and pop-ups.
Get your website right and it can turn into a lead generating engine while you sleep.
5. Delighting customers
Most businesses aim for a high level of customer satisfaction, but the likes of Apple and Amazon go that step further and delight their customers.
Delighted customers are those ones that are excited to buy your product and recommend you. Satisfied customers are the ones that will compare you against your competition before they choose which of you to buy from. One unhappy customer can do a lot of damage to your reputation - so it really does pay to invest a lot of your energy into the customer experience.
Companies like Amazon have raised the bar and for those of you who don't do the very best for your customers - you will be left behind. To delight you have to surpass your customers expectations and deliver an unmatched experience.
How to fix it:
- Understand why your customers choose you and what they need
- Set expectations at the start of the engagement
- Deliver on those expectations
- Work out ways you can provide unexpected extras that go above and beyond
6. Hiring talented people
You can't scale your business unless you get the right talent working for you. It can costs thousands when using agencies to find staff. Hire the wrong people and high staff turnover becomes another problem.
Meeting someone for an hours interview isn't really enough time to find out what they are truly capable of, so in certain circumstances a company may choose to use temps who are looking for a permanent role - try before you buy - this is also an expensive option.
How to fix it:
Create personas for the type of candidate you want to hire. Each persona should be different for each role within the company. Your personas should share some underlying traits around your companies culture. They need to believe in what you are trying to achieve and have a clear idea of how to make that happen.
Just like you do with your customers, start attracting candidates to your company's brand and make them interested in learning more. Before you know it you'll be drawing candidates through your website and turning them from leads into applicants.
7. Managing workflow
Once you have the right staff, your next challenge is to train them properly and to manage their workflows. You need to make sure your teams can continue to work efficiently as your business grows.
When staff can't work efficiently a business soon starts to fall apart.
How to fix it:
You can't be everywhere at once, but there are things you can put in place to keep your staff happy.
Create ways your staff can give feed back and suggestions for improvement. This can be done through:
- Employee satisfaction surveys
- Frequent one-on-one meetings with direct reports
- Asking about threats to the business and the issues that cause your employees pain
There could be one problem, or a number of issues. Your staff may already know what's needed to solve the problem, so always invite them to include a solution if they feel they have one.
Heading off problems, getting the right tools and software as well as training to enable your staff to be the best they can will be rewarded tenfold. When you employ exceptional people, they will expect an exceptional boss. Happy staff who want to come to work and do the best for you will lead to a successful future.
8. Financial planningBusinesses have budget restrictions based on revenue and margins.
It becomes a challenge to improve efficiency, while trying not to over spend or taking on too much credit.
It doesn't matter if you have to take on credit or loans to get your business underway. What is important is how fast you can pay off debt to be free of your creditors.
How to fix it:
Business Accountants, Business Analysis and Financial advisors can help you to understand your financial situation and show you how to make good financial decisions. As soon as you can afford to work with one do so. You don't need to hire them as a member of staff, you can use an external company or individual.
- Keep on top of costs and review them often to see if you can get a better deal where possible.
- Keep on top of cash flow: When you know when your customers are going to pay, you'll be able to plan to pay wages, tax, loans and suppliers.
- Do daily bookkeeping - 5 minutes a day is easier than a couple of hours at the end of the month, especially if you can't remember what a particular receipt was for.
- Don't allow credit to get out of hand
- Build up a reserve of cash as soon as possible.
Many businesses will push to grow quickly. But if a company grows too rapidly, it has to hire fast putting pressure on existing staff to train new people, and that training is likely to be half hearted because the existing staff are too busy, leading to more mistakes. This can cause delays in production and distribution. It can also lead to delays in paying suppliers, and the need to find bigger premises.
How to fix it:
There isn't an easy answer to this problem. At some point a business is going to experience rapid growth.
The best thing you can do is not to obsess over every detail, just obsess over the right details. Customer services is vital, retaining great staff is very important, but your product or service can be updated and improved as you go, so obsessing over it to be perfect straight away isn't as important as getting a working product out on the market that may need tweaks once customer feed back starts to be given. Don't get me wrong your product is important, but some people obsess so much it takes years to get a perfectly good product on the market.
10. Disaster planning
With flooding, Brexit and now viruses, disaster planning has become very important. Not being prepared is no longer an option.
When it comes to flooding or fire this usually involves a long period of closure and building up your bricks and mortar business again.
Brexit has caused problems with more paperwork, needing more staff, having to collect more taxes, and having stock stuck at ports.
Covid on the other hand lead to everything being shutdown for months at a time.
Like anything that causes a major change to life (war/pandemics) also creates the opportunity for rapid change. Throughout 2020 many retailers and restaurants started to sell online for the first time. Those that had already invested in their online businesses saw rapid growth in online sales - to the point some businesses shut their shop doors altogether to concentrate on online selling only.
When it comes to disasters it's either about repair and restarting, or rapid change.
How to fix it:
Make a list of all the things that are likely to go wrong and how long that could affect your business.
Once you have your list, work out a process for dealing with that issue, who needs to be contacted, where the insurance details are kept, likely staff lay offs, how much stock would be destroyed, how much cash would be needed to repair damages or see you through a period of closure until the insurance company pays out. What foreseeable rapid changes could be expected and how would you go about implementing that.
Having a cash reserve will always make life that bit easier and less stressful when a disaster hits.
It's impossible to be ready for everything that a business faces, many new business owners learn as they go along. But being prepared and having proper planning and a strategy in place will aid you well in making your company a long term success.