Running a profitable small business is no easy feat. Ask any entrepreneur what their biggest business challenge is, and you’ll hear a number of varying answers. Some struggle with delegation, while others can’t keep on top of their finances.
Small business owners will face an endless number of issues, but a select few challenges prove to be the most problematic for every entrepreneur.
From Hiveage, here are 6 of the most common small business challenges, along with solutions you can use to conquer them:
1. Cash Flow Issues
Money problems in their various forms are top of most lists of company woes, and for small businesses the major worries are clients stalling payments, unexpected outgoings, and outstanding bills that won’t wait to be paid.
There are some tried and tested money management tools that can help you to manage cashflow, multi-talented apps that can create budgets, calculate VAT, automate bill payments, alert you to unusual outgoings and provide a free credit score.
Using online invoices and reminders is also a powerful way to persuade reluctant clients to part with money. There is great software out there that can do this for you, including Hiveage, which provides free invoicing and can accept payments and automatically charge clients.
It’s tempting to try to do everything if you’re a small business owner, and long hours add pressure. Fatigue, one of the most commonly overlooked small business challenges, can leave you disorganised, forgetful and cranky, not paying as much attention to clients as you should, and making mistakes.
Business owners have to pace themselves, which includes embracing strategic delegation, something that for any highly motivated individual isn’t an easy ask. Start by identifying business elements that don’t require your expertise, such as mailing, and take on an assistant, even part-time, to help out – after all, it’s an investment that frees you up to do what you do best!
You could also consider delegating tasks that are outside your skillset to specialists, such as accountants or legal experts – the results will likely be more professional and can save you endless headaches.
It’s important to get on top of these things, because taking time out is critical for your health and wellbeing, not to mention family relationships. Get into the habit of segmenting your day – analyse when and how you work best, the time you’d like to put into leisure or family, and create schedules that identify key activities and how long they’re likely to take.
3. Finding and Retaining Profitable Customers
There is a business adage that you need customers with a problem only you can solve, and it’s for you to identify that unique selling point and communicate it clearly to your would-be customers.
You can start by researching your customer base, and identifying the characteristics of your existing best customers (those with the highest volume of sales, and the most repeat custom). Make sure you integrate into this analysis any costs associated with particular customers, so you have a clear view of their net value to you.
Once you’ve done this you can focus your energies on attracting new clients from your most profitable segment, carefully differentiating your offer to ensure it appeals directly to this type of customer.
To understand what customers want, you can ask for feedback from current best clients, which also counts as part of your follow-up engagement – another ‘must do’ when you’re looking at keeping valued partners. Find out what forums or other types of social media these customers use, and make sure you’re in there and taking notes.
4. Motivating Employees
Employee buy-in is very important for small businesses in particular, as there tend to be fewer of them and apathy has a greater impact. There’s a real need to understand what employees want (other than a million pound paycheck), and there are a few possibilities to boost employee engagement for when this isn’t an option.
Ensuring employees are happy and productive means communicating clearly, and being approachable. Good companies foster a relaxed atmosphere where staff feel able to talk to management. Perks like free tea and coffee, free biscuits or fruit, and staff Christmas parties cost relatively little and can really help create a favourable impression.
You should also ask for employee feedback on their needs – this is not an option, it’s a must. Too many businesses don’t look at what their employees want, assume everything is fine, then wonder why they have a high staff turnover. Don’t let this common small business problem sneak up on you too.
5. Having Too Many Overheads
Overheads are one of the biggest small business challenges, and excessive overheads have driven many otherwise good companies to the wall.
Resolving them involves paying close attention to what customers actually want and providing products or services sharply tailored to suit. This means working out what customers need and trimming back gold plating or unnecessary services, or elements of products that they won’t use or aren’t interested in. Analysing your transactions and asking existing customers what they want is helpful.
Where you add value, make sure that it doesn’t increase overheads (for example through well-judged deals on less-popular products, or other offers that benefit both you and the customer). And don’t forget to ask yourself hard questions, such as whether you need that new car or printer, or whether it’s just for show…
6. Staying Current
Small business owners can be so busy they forget to keep up with what’s current in their sector. It takes so much time just to keep on top of the work that blue-sky thinking can seem an unnecessary burden. Nevertheless, you need to keep up.
When you’re scheduling your week, don’t forget to allocate time to track competitors and undertake awareness-raising activities such as reading (or writing) blog posts. Create Google Alerts, use Twitter hashtags to keep up with what’s trending, and mine the wealth of free, and very targeted online information out there on sites like newsnow.
If you can schedule days out to go to sector conferences and exhibitions, the payback in terms of contacts and potential sales can be massive. Research events thoroughly to make sure that their target audience is precisely your target client group. If an event is really important, you could also investigate becoming a speaker, positioning yourself as a thought leader among your peers.
If you have grit and tenacity, you can overcome any challenge that’s thrown your way.