Top 7 Challenges Small Businesses Face Today
While UK recession has passed, it has left an uncertain future for UK business.
No matter if you’re a one-man band or a multi-national organisation, every business faces similar challenges in their day-to-day running. With a small business these challenges are amplified. Below are seven of the biggest challenges that small business owners are facing, and suggestions as to how to overcome them.
The current economic climate is something current business owners have not experienced before so many are unsure as to how to push their business forward without the guarantee of a stable future. Business growth and continuity is built from business owners being able to plan long-term and develop these plans over a period of time, but this is harder to do because of the lack of guarantee as to the state of the economy over the next couple of years.
Despite this uncertainty in the economy, it’s important small business owners still build a strategic long-term plan so they have a clear vision as to how they want to progress. Having a plan in place will let you look to the future and help you to build your business value, and allow you to better overcome any challenges that come your way.
It’s also important to keep track of how your business is progressing. Keeping a monthly record of your sales output and major costs is often not enough. The more key information you have on your business on a weekly and even daily basis, the better your understanding of your business will be. More understanding means you will be in a much stronger position to plan for the future effectively.
2) Attracting new business
This has been found to be the biggest challenge that organisations are facing. Again because of the rocky economy, fewer people and businesses are looking to spend their money, meaning that the market for drawing in new custom has shrunk.
Both customer retention and building up your customer base all stems from your customer treatment, showing them that you care about the service you provide. The marketplace is rife with businesses fighting for any new custom, so it’s up to you to make sure that your business image is the best in can be in order to compete.
Spending money on the right marketing and advertising is clearly a very important decision, but many businesses find they attract new business through existing customers via word-of-mouth – so finding new customers often starts with making sure you exceed the expectations of your current customers.
Whenever there are issues with the economy, it is guaranteed that there will be a knock-on effect for both personal and business finances. With limited funding help available, and the schemes that are available being extremely hard to secure due to lenders being risk-averse, many businesses have struggled to manage their cashflow successfully and keep their heads above water.
Knowing your means is key here, overspending to any degree could be detrimental to your business. Staying in control of your finances in fundamental, if your cashflow is limited you need to keep on top of it – remember Cash is King. See my separate article speficially on this issue
While it’s good that the country seems to be recovering from the economic troubles, it also means that more and more businesses are being set up, bringing more competition to the table. This means that businesses must not get complacent – while your marketing strategy and advertising tactics may have worked for you in the past, the market have changed and you need to keep on top of the developments.
Taking a step back from your business and reviewing both your setup and plan as well as looking at your competition will help you to take control and build a business image ready to take on the new marketplace.
It can be extremely difficult for businesses to recruit and maintain quality employees. Being able to find talented individuals with the right skill set is key for businesses wanting to grow is just the first step, businesses need to provide a working environment that is desirable in order to retain talent.
You may feel that you are limited in the calibre of candidates you can attract to your business if cashflow restrictions mean you can’t offer high salary levels to new employees. This is where you’d be wrong: Simply offering your employees a workplace where they feel valued and supported will attract decent candidates. Rewarding staff, offering flexible working hours and holidays is more likely to get applicants in today’s marketplace than simply high wages with a regimented working environment.
Technology is everywhere these days and it is one of the things that is vital for any business to stay at the forefront of – but it’s almost impossible for businesses to keep up with the speed at which new developments are occurring.
Unless you have a huge cashflow, it’s unlikely you’ll be able to constantly upgrade your business technology, but there are ways and means around this. Keeping up with the technological developments that effect your business sector will enable you to plan ahead and fit the developments into your business plan, helping you to make informed decisions about if and when to purchase or upgrade to benefit your business and your customers.
7) Balancing Quality with Growth
Business growth is part of every business plan, but it’s also important to remember that success is too – so it is important that the growth is managed well enough to ensure that success prevails. Ensure your business plan is up to scratch with realistic predictions about how your business will grow to enable you to support it on its journey. Options for unexpected growth should also be considered to ensure that you’re prepared, just in case.
If your business does begin to grow quicker than expected or beyond expectations, it is important that you keep on top of it. Unmanaged growth could lead to detrimental effects on the business, so realistic goals with consideration as to how to deal with all other possibilities are vital.
If you want to discuss the challenges your business is facing and how best to address them, pick up the phone or send me an e-mail.