When entrepreneurs see every challenge as an opportunity to compete, the business world becomes eventful. Converting a vision to a lucrative business is empowering, especially if the urge is to become an employer, innovate for a better future and generate consistent revenue.
Starting from funding to managing people, small business owners face numerous challenges. Sometimes it can be emotionally draining if the environment is not agile. Read on to identify the top seven challenges small business owners face and the tips to overcome them.
- Capital or Cash flow
- Single Client
- Depending On the Founder
- Customer Acquisition
- Employee Retention
- Scaling up
Many small businesses face a cash crunch to pay the bills and grow their business. Resort to small business loans, crowdfunding, venture capital funding, or even friends and family to keep the business afloat. Thorough tracking of fund flow can help entrepreneurs budget better. Take professional advice when you need it.
Try not to ride on a single whale for your payments and manage cash flow by staying on top of invoices. If more than half of your income comes from a single client, it’s time to generate new clients and diversify your income channels.
A passionate founder may work largely on product development or business strategies and even all other functions within the business. Acquire the right talents and delegate tasks appropriately to a fully functional team to avoid over-dependence on the founder.
Finding who your customers are is crucial to gear your business. Statistics show that the cost of acquiring new customers has increased close to 60% in the last six years. Create a buyer persona and offer solutions through your products and services. Get a fix on the platforms where they are active and create engaging content. Also, be mindful to retain your existing customers through exceptional customer service.
19% of small business owners cite employee retention as their second-largest challenge.
As small businesses require employees to wear different hats, think clearly over the roles they have to play. Hire for essential positions and offer them a competitive package within the industry. It will enhance your future recruiting efforts.
A small business owner should primarily focus on creating brand awareness. Tie-ups with a locally successful brand is a great way to build trust. Remember, word-of-mouth marketing accounts for 80% of customers’ purchase decisions. At BNI, a structured referral marketing system helps small business owners create meaningful connections with like-minded people.
When your business grows beyond expectations in a short span, you don’t know what to sacrifice to scale. You may instantly require good talents because your clients are ready to collaborate. The cue is to not obsess with everything like time management, quality products, and employee benefits. But obsess over factors like customer service as it is pivotal for business success.