In the struggle to grow and compete with top brands, small businesses are faced with a myriad of challenges. From funding to strategic planning, entrepreneurs have to ensure they're threading on the right path to avoid grave pitfalls.
But that's not always easy when you don't know what you're up against.
To be forewarned is to be fore-armed. So here are the top challenges small businesses are likely to face to get you equipped for the journey ahead.
1. Building brand awareness
Building brand awareness is now more critical than selling directly to your audience. In fact, 70% of brands say building an audience is more valuable than direct sales. You see, if people don't know who you are, they're less likely to buy from you. Selling to a stranger becomes less effective.
Knowing how important brand awareness is, most marketers have made it their top priority in their marketing campaigns.
But as a small business, you may be overwhelmed: how do you get the word out there and build a community before you start making sales? Do you have to wait patiently for months before generating sales?
You see, the top brands in your industry all started from somewhere. It took time, patience, and hard work before they got to where they are now.
Public relations, co-marketing, and blogging are sure-fire strategies to grow your brand awareness. Learn how to maximize your public relations, partner with other brands, and blog about your target audience's pain points.
2. Maximizing email marketing
Another challenge small businesses face is nurturing individuals who have come across the brand. In this digital era, email marketing is more or less a must if you want to nurture your audience. For example, someone comes across your website or blog content. Do they just go away after reading? By offering your audience something of value that makes them release their email, you bring them into your world.
Email marketing remains the most effective marketing channel. You stand a chance of earning $42 on every dollar you spend on email marketing. Sadly, many SMB startups fail to realize or utilize this powerful marketing strategy the right way.
Instead of buying emails, build opt-in email lists. Let site visitors voluntarily give you their emails in exchange for freebies or newsletters. When they voluntarily input their emails, they'd be more willing to read your newsletters and get nurtured throughout the funnel.
3. Building loyal customers
Many small businesses instinctively go after new prospects and neglect those they've successfully won (those who end up buying). But the truth is, it's far cheaper to retain an existing customer than to acquire a new one.
Ensuring your customer gets an excellent service delivery entices them to make additional purchases. It doesn't stop there. They may use word-of-mouth to bring you more customers without you spending a dime. You simply give each customer great service and engage them via social media and emails. You may even offer them extras and discounts on their next purchase.
The problem is this: small businesses often lack a dedicated customer service team, and client satisfaction suffers in the process. Instead of customer service experts, SMBs try to hire more marketers because sales are their utmost priority.
Being mindful of customer service is key to solving this challenge.
4. Setting realistic goals and actualizing them
Actualizing goals is one challenge small businesses face. Many entrepreneurs start with the mindset of making revenue without any specific goals. For example, expanding to more cities within a certain time or venturing into an additional subsidiary service.
Even when some entrepreneurs set targets, they fail to actualize them on time. This is due to some factors, such as being occupied running the day-to-day operations as the CEO, with little or no time to focus on the bigger picture.
Every end goal needs a step-by-step process to actualize. It's, therefore, crucial to prioritize strategic planning for results. There's peace of mind knowing you have a strategic and practical plan driving you towards your goals while still having enough time to manage your daily responsibilities.
Many SMEs comprise entrepreneurs who work off their limited personal capital, expecting to make a profit on it as time goes on. They work with cost and margin pressures and have their eyes solely on sales.
As a result, such entrepreneurs do not pay attention to making strategic plans for business growth and adopting technologies. The business ends up looking stunted as it’s all about putting every profit back into the business.
Even when you have a seemingly substantial personal asset as a proprietor, consider taking business credits and grants to grow your company. Separate your finances from your company, and leverage your business capital towards expanding your brand. If you’re not confident channeling your available capital in the most profitable direction, consider hiring a financial advisor.
6. Hiring the right talents
Small businesses may struggle to hire top talents due to their limited resources. They may not be able to meet up to the wage demands of highly-experienced candidates, and top companies have already hired most experts. Hence, SMBs have to settle for less or just a handful of employees. Sometimes, one employee has to perform multiple roles, including those in which they're not well trained.
This may have a detrimental effect on the company growth as service delivery suffers. Also, your low-quality team may not understand your business goals or be driven enough to meet them.
A fantastic team brings so much to the table. Highly skilled and experienced employees will contribute value independently without you always having to instruct them. If you're low on funds, using business process outsourcing or managed service providers is a cost-effective choice.
BPO and MSPs offer you top talents without you having to pay each person a fixed monthly wage.
One notable challenge businesses face is not knowing when and how to scale. Many business executives lean towards growing their businesses at all cost. But if you expand your business too quickly before you're ready for it, you run into trouble. You may have inadequate hands to meet the increased demands, which may lead to poor service delivery, in turn costing you some valuable customers.
These are just some of the many challenges small businesses face in today's commercial ecosystem. Businesses rise up daily, but not all get to succeed. It takes strategic planning and consistent effort to get where the big guns currently are.