The 7 Biggest Problems Small Business Owners Face – And How to Overcome Them
Entrepreneurs across the board are prone to running into challenges, and small business owners are no exception. In fact, small business owners are at a strong disadvantage, in that they often don’t have enough manpower to take care of their needs.
Although each business has its unique set of issues, there are several problems that are almost universal – but that doesn’t mean you need to suffer through them. Here are several ways to turn the world’s top small business challenges into opportunities for business growth.
1. Hiring Talented People
Regardless of what kind of business you run or where you are in the world, you will likely run into hiring trouble when you’re ready to grow your team. Hiring can be expensive, once you factor in employee benefits, recruiter fees and salaries, and that’s before even knowing how to find “good” candidates – people who are in line with your business’s values and are motivated to work hard.
However, bringing new people on board is an integral part of growing your business and taking it where it needs to go. So, how do you ensure you hire people of quality when you begin recruiting?
Firstly, try to look for people who can fill roles that you feel weak in. If there’s a particular skill set you’re missing, you’ll want to start with candidates that can fill in those gaps. Come to the recruitment process with a clear idea of what the role will entail, so that you can ask the right questions and make sure your hire is up to the job.
Also, don’t rush it; there’s no guarantee that the first person who comes along is the best person for the role. It’ll be more worth your while to ride out the wave of candidates who come your way until you find the one who clicks, as opposed to hiring someone immediately and then having to replace them two months later.
Lastly, know how to delegate tasks. Your business is a product of all of your hard work, and it can be hard to pass over aspects of it to someone else – but that’s why you’re hiring in the first place! The sooner you let go of control, the easier it will be to run a more effective ship long term.
2. Lead Generation
You have a great idea, but the masses haven’t yet heard about it – and you don’t have many prospective buyers. Where do you find them?
Most small business owners run into difficulties with lead generation, whether they can’t find leads to begin with or they’re having trouble coming up with creative ways to reach new customers.
Understanding your market is the first step. Who are the people who benefit from your business? What kind of customers do you already have? Analyzing the demographics and behavior of your current customers can help you draw conclusions about the kinds of people you should be targeting.
Then, you should focus on optimizing your website to capture and convert leads. There are usually a few specific pages on a business website that draws the majority of leads – think About pages and Contact pages – which should all be easy to read, make your offer clear, and use strong images. And, make sure to add call-to-action buttons to each page, asking your leads to sign up to your service or subscribe to a newsletter.
3. Building A Brand Identity
No matter your industry or niche, building a brand identity is a crucial part of growing your business. Your brand identity is the “face” your brand puts out into the world and gives your business a personality. It is the thing that made a coffee shop chain into Starbucks, and what turned a regular computer company into the tech giant Apple is today.
In other words, your brand identity is how you position yourself in the world, differentiate yourself from competitors and make yourself stand out to your customers. However, when it comes to creating a brand identity, many small business owners have no idea where to start.
The first step is to identify your target audience. Think about what sets you apart from your other competitors and why your audience needs your service.
When making a logo be mindful of the fonts and colors you use in your logo, as they will serve as a template for the rest of your brand identity. Try to create a logo that you think will resonate with your audience, as they’re the people you’re trying to attract.
Also, make sure to set yourself up online, from social media platforms to your own business website. As you create content, be mindful to stick with the color palette and fonts you’ve used in your logo no matter the platform; the more consistent you are, the more your customers will learn to trust your brand.
4. Managing Cash Flow
One of the biggest sources of stress for small business owners is money, whether it’s finding an initial investment, having enough capital to cover overhead costs, or making enough money to scale. And, once you do have money coming in, learning how to manage cash flow can be a challenge in and of itself.
Not every business owner is a numbers whiz – and that’s okay. The easiest way to ensure your cash is being appropriately allocated is to hire a professional to oversee the process for you. It may feel counterintuitive to spend money to manage money, but hiring an accountant can actually save you tons of cash in the long run. They can help you fill out tax forms, organize your business structure, and cut down on expenses, among other things.
Or, you can try using an online accounting software, like Quickbooks or Freshbooks. These tools are great for helping you track and manage your cash flow, in addition to providing you with invoices, receipts, and other important documentation.
5. Customer Retention
You might know how to bring customers to your business, but how well do you fare in keeping them there? According to a US News and Report Study, the average American business loses 15% of its customers each year.
This makes sense, as 47% of consumers will take their business to a competitor within the same day of experiencing bad service. But, just because this is a common problem for business owners doesn’t make it any easier to deal with!
Luckily, there are several ways to increase customer retention. Use a CRM to start tracking your customers’ behavior, such as their purchase pattern, history of interactions with customer service, and which products (or services) of yours they’ve used in the past. Once you get an idea of their behavior, you’ll be able to form predictions about when and why your customers leave – and take steps to prevent it.
Also, you may want to up your content strategy. For example, consider sending periodic newsletters with actionable insights related to your niche, or with tips on unique ways they can interact with your products. If your customers feel like you have valuable content to offer them, they will be more likely to stick around.
6. Dealing with Competition
Competition is a necessary evil of owning a business, and it can be difficult to know how to navigate the market. Mom and pop stores are often swallowed by chains; brick-and-mortar stores have to hold their own against the online universe. And, when there are competitors who have been around much longer than you have, it can be difficult to get your foot in the door and “claim” your market.
One way to navigate this challenge is by reducing your prices to undercut the competition. Nothing is as attractive to consumers as a good sale or a bargain price, and it will give you a way to create a loyal customer base that will stay with you long-term – even if you decide to raise prices later.
You may also want to consider offer customer loyalty programs that incentivize new customers to choose you; you can create a points system that they can use to redeem rewards, or entitle them to one free item every time they spend a certain amount.
7. Managing Your Time
Running a small business usually means wearing many hats – those of a CEO, marketer, social media manager, content writer, tech expert and bookkeeper, to name a few. And, putting all of those jobs aside, you have friends and family that rely on you to show up when they ask it of you.
As most small business owners treat their company like their baby, it can be really hard to know when it’s time to stop working for the day (or week, or month) and turn their focus elsewhere. However, burning out is almost inevitable if you don’t know how to divide your time properly – especially if you don’t nurture the “life” part of your work-life balance.
That said, once you’re aware of the challenge, there are many ways to learn how to make efficient use of your time. Start by reading up on productivity hacks to help you develop better habits in general, such as procrastinating less. Get a task management system that helps you organize your day, and write your weekly goals out in advance. (Make sure to break your goals down into manageable assignments, so you don’t get overwhelmed and break your time table).
You can also use templates to help you with any writing or design tasks you have on your plate; there are pre-written scripts for business proposals, email updates, presentations, and even elevator pitches. All you have to do is replace the template’s general information with your own, and you’ve just saved yourself hours of potential work.
Challenges are unavoidable in the business world, but they shouldn’t be a cause for concern. As frustrating as they may be, the beauty of challenges is that they present opportunities for growth. Whenever you come up against a new problem, try to think of creative solutions, and you’ll see that your business benefits in the long run.