4 Common Challenges of Small Businesses – and the Solutions
Any small business owner can attest that building a successful business takes time, consistent effort, flexibility and solution-focused thinking. And while owning a business can be incredibly rewarding, it can come with some rough terrain that can create setbacks and disappointments.
One of the most vital tools in the savvy business owner’s arsenal is thoughtful planning. Sure, some wins can come from a fly-by-the-seat-of-your-pants approach but for a business to have sustainable growth, careful preparation is key to defending against challenges.
Here are four common challenges small businesses face and the solutions.
Lack of funds
Large companies typically have enough cash flow to pay for operating expenses in difficult economic times and unforeseen circumstances. This isn’t true for many small businesses. In the event a client fails to make a payment or there’s a dip in sales, owners may not be able to pay their bills and employees on time leading to vendor difficulties, employee resentment and turnover and a cycle of bad business practices.
The solution: Plan for a worst-case scenario cash flow. Create a monthly pessimistic forecast of your cash flow that includes estimates of expenses, including rent, utilities, vendor payments and salaries, then determine what state you’re in. Do you still have positive cash flow? If not, you may need to boost cash inflow or cut some unnecessary costs.
Attracting customers
It’s a challenge that every business owner faces, particularly in the early years and when there’s intent to scale. Without customers, there’s no income and, unfortunately, this common challenge can lead to increased debt and closure.
The solution: Make getting to know your ideal customer one of the top priorities. With so many options for consumers nowadays and the inundation of ads, influencer campaigns and marketing ploys, simply marketing to the general masses will likely not produce effective results. Spend the time to figure out exactly who your customers are to get specific with your marketing efforts. Whether it’s hosting a free workshop to professionals via Eventbrite, creating targeted ads on social media, creating a referral program, or approaching local media, you’ll have more chances of gaining a larger customer base.
Managing workflow effectively
Adopting new technologies, doing marketing research, responding to customer emails, tracking invoicing, overseeing projects, attending meetings, managing contractors – the list can go on and on and on to what fills up a work week! The amount of tasks on the small business owners’ to-do list can seem never ending. According to a Gallup poll, 39% of small business owners work 60 hours a week. It’s no wonder that before long, stress becomes a constant companion, burnout ensues and mistakes happen that jeopardize the reputation of the business.
The solution: Get the support of a Virtual Executive Assistant. A dedicated assistant can help complete all the menial and administrative tasks that you don’t have to do yourself. By offloading tasks like social media content creation, email management, customer service, calendar bookings and project management, you’ll have the mental space to focus on attracting new clients and sustainable growth.
Scaling effectively
Even the most promising of businesses can implode despite public interest. The hard truth is that not all small businesses are ready to scale. Some businesses will push growth at all costs to their detriment and be unprepared for the multitude of changes and challenges that inevitably come – hiring too quickly, lack of employee training, unable to keep up with projects, micromanaging and not delegating tasks.
The solution: Simply put, be prepared for growth – and know when it’s time to grow. If you’re consistently exceeding business targets, it may be time to plan to scale. Create a durable strategy that includes monthly sales projections and track your progress and have a budget for expected and unexpected expenses. Evaluate the costs of expansion such as increasing inventory and hiring costs. Take your time hiring the right employees and set them up for success – be sure to streamline processes and procedures so that inefficiencies don’t cause mistakes and issues. Particularly for those moving from a sole proprietorship to a company, be prepared to loosen the reins and trust your team so that you’re not creating redundancies and low morale.
Hiccups will inevitably occur – it’s all part of the journey of growing a business. But with some thoughtful planning, temporary setbacks may not have as large an impact and your business will not only be resilient when faced with challenges but can thrive.
Want to take back your time to grow your business? Book a consultation to find out how a Virtual Executive Assistant can help.
