At the start of 2018, the number of small businesses in the U.K. was 5.6 million, accounting for 99.3% of all private sector businesses in the country. That figure would undoubtedly have been higher had many other small businesses survived to that point. Unfortunately, about half of all small businesses shut down by the fifth year.
Maintaining any business is a considerable challenge. All business must overcome certain standard challenges to thrive, including recruiting the right employees and creating a formidable brand. However, there are specific challenges that are unique to small businesses.
So what issues do you have to deal with in your small business? More importantly, how can you overcome these business challenges and go on to succeed? Read on to find out.
1. On-Boarding a New Staff
At the start of your business, you need to employ new employees to fill the various job roles in your small business. Bringing every new employee on board is among the small business challenges that take the most time.
So how do you overcome this challenge?
You can create a list of information for all new employees to go through, then organise a meeting where all of you can come together and go over essential details. From the outset, create a team dashboard to keep all employees regularly updated. Encourage employees to ask questions or offer suggestions on how to solve work-related issues.
2. Compliance to HR Regulations
Recruiting a competent staff is only part of the job. Next, you’ll need to make sure that you’re complying with all HR regulations, and that can be a costly affair. A survey by the National Small Business Association shows that on average, a small business owner spends $12,000 or more every year on human resource compliance.
How can you navigate this challenge in business? One way is to automate payroll if you haven't already. Find a solution that will effectively automate work hours and keep track of overtime pay. By doing so, it becomes easy to maintain accurate records for every member of staff and automatically determine how much overtime payments you need to make.
It's also beneficial to get the most recent version of the employee handbook and go through it thoroughly. Share the handbook with all members of your team and ask them to sign an acknowledgement that they've gone through it and understood all human resource regulations.
3. Attracting New Clients
How many resources do you have as a small business? The vast majority of small businesses have to work on limited resources when it comes to marketing. Big ad campaigns are almost always out of the question.
So how can a small business make their brand attractive to new clients? Thankfully, there are lots of other creative and affordable ways to reach potential clients. Why not try promoting your business online?
Email marketing is one of the best strategies to adopt. It's a cost-effective way of sending targeted messages to potential customers. This method works on all platforms and has a remarkable return on investment.
Focus on word-of-mouth marketing too. That means providing exceptional customer service and letting your clients do free marketing for you by telling others how great your company is.
4. Limited Budget
In the world of business, cash is king. The more capital you have, the easier things are going to be. Unfortunately, having a limited budget is one of the most cited small business problems.
How do you divide the resources you have among all the tasks and projects you have? How can you tell which ideas to allocate money to, and which ones to set aside?
An effective way of managing your project budget is to utilize a resource management software that offers you a comprehensive overview of your business’ budget and expenses. You could also come up with a KPI dashboard, so you have a clear overview of your overall business performance.
5. Stiff Competition Business Challenges
Your product may be excellent, but how many other people do you think have created similar ones before you? Even after conducting thorough market research and choosing your ideal niche, chances are you'll still be up against someone else. Finding an edge over the competition is among the top company challenges for businesses that are still starting out.
So how can you make your product stand out? The best way is to emphasize what makes your business and product unique. The great news is that there’ll always be people looking for a product just like yours, but you need to make sure they’re aware of your existence.
Never sit idle and hope that someone will come to you looking for your product. To create brand awareness and enhance conversion rates stay as active as possible on various social media platforms.
6. Managing a Growing Client Base
When you're starting out in business, every new customer you get is essential. As you continue doing things right, your client base becomes larger. If you’re serious about maintaining a solid customer base, you need an efficient customer management system.
But how does a customer management system work? Firstly, it automates many aspects of your small business, assisting it to adapt and keep growing. The system automatically tracks customer purchases and manages essential accounting matters, leaving your team with more time to provide better customer service.
A customer management system also accurately tracks the specific customer segments buying a particular product. Such information is critical when it comes to figuring out what your clients want so you can focus on providing it to them.
7. Keeping Up With Technology
While technology is an indispensable part of business success today, keeping up with it can be a big challenge for small businesses. Each new day brings a set of new technological changes, and failure to adapt soon enough can mean giving your competitors an advantage over you.
So how do you make sure that you stay updated? You can consider working with a consultant to help you integrate the latest technologies in app development, mobile, and cloud computing.
You Can Overcome Small Business Challenges
One of the best ways an aspiring entrepreneur can prepare themselves before opening a small business is by knowing what business challenges they’re likely to face once the business becomes operational. This way, they can better prepare on how to deal with these challenges and boost their chances of success. The thing to keep in mind is that for every business challenge, there’s always a solution.